Resimac shuts down home loans business

New mortgage applications will cease from July 1

Resimac shuts down home loans business

UPDATED: Resimac has announced it will shut down its New Zealand home loans business in major news for the non-bank lender.

In a media statement, the company said it had undertaken a comprehensive review of the New Zealand mortgage market and it has determined that the competitive environment will remain restrictive for non-banks for the foreseeable future.

As a result, from July 1, 2024, Resimac will cease accepting new home loan applications in New Zealand.

Resimac has confirmed it will continue to service its existing New Zealand customers and any customers in the application pipeline.

“Resimac New Zealand has provided customers alternative lending products since 2012 and has been a trusted non-bank lender during this time,” said CEO Scott McWilliam (pictured above).

“I would like to personally thank all of our people, brokers and business partners who have supported our New Zealand business over the past 12 years.”

Its parent company, Resimac Group, has been in operation since 1985 and in New Zealand since 2012.”

'Extremely challenging' conditions

While Resimac declined to comment further at the time of writing, it's evident that the weak performance of its New Zealand lending division in FY23 reflected the tough NZ market. 

Resimac NZ’s total segment revenue actually posted positive growth in FY23, rising to $50.7 million from $37.7 million the year before.

However, with the company’s interest expense more than doubling in a year, and with other expenses factored in, the New Zealand segment resulted in a $2.2 million loss before income tax in FY23.

In the Resimac Group 2023 annual report, McWilliam and chairperson Warren McLeland spoke about the “extremely challenging” macro-operating conditions the company was facing, namely inflation, rising interest rates against a backdrop of near to full national employment.

“Business and investment confidence was at best subdued, and supply problems continued across many sections of the economy,” said McLeland speaking about both Australia and New Zealand.

“Notwithstanding the scale and severe impact the macro-environment has placed on Resimac this year, and the short-term outlook for an improvement is still very clouded, your Board and executive management team continue to have confidence in the future of our industry, and in particular, your company and its position in the industry.”

Overall, the latest news about Resimac's New Zealand business could be viewed in the context that Resimac had acknowledged the need to adjust their strategy in light of the economic slowdown and extended timelines.

In those results, the company assured stakeholders that regularly monitoring and adapting the strategy was “a top priority”.

Mortgage adviser reacts to announcement

Jeff Royle, mortgage adviser at iLender, who said he had been among Resimac’s top advisers and advocates since its inception to the New Zealand market in 2012, spoke to NZ Adviser about the news.

“I’m absolutely shocked and bitterly disappointed that there were no heads up or warning,” said Royle, who is colloquially known as “Mr Resimac”.

“I’ve had advisers and other people in the industry ringing me since the news broke.

“On behalf of them, there’s much that needs answering:

  • what happens to our trail book?
  • what happens in the event of clawback?
  • what guidance can be given when discussing existing customers?
  • what provision is being made for customer support going forward?

“We need some clarity about what comes next,” said Royle.

How will Resimac's withdrawal from New Zealand affect you and your customers? Comment below