Liberty Financial Group (LFG) H2 2024 earnings summary

Executive summary

• FY 2024 was marked by a challenging and competitive trading environment, with net interest margin compression, but portfolio growth was maintained through targeted diversification and a shift toward higher-yielding assets.

• Investment grade rating was upgraded to BBB, with return on equity at 11% and strong broker and customer Net Promoter Scores.

• Statutory NPAT for FY24 was $115 million, down 36% compared to FY23, and underlying NPATA decreased 29% year-over-year to $132 million.

• Digital investment continued, including the launch of a customer app and ongoing automation initiatives.

• Higher bad debt provisions were made to support customer hardship.

Financial highlights

• Underlying NPATA was AUD 132 million, down 29% year-over-year; statutory NPAT was $115 million, down 36%.

• Net revenue was AUD 583 million, down 1% year-over-year.

• Net interest margin declined to 2.51% from 2.76%.

• Cost to income ratio rose to 28% from 26.9%.

• Distribution per security was AUD 0.25, down from AUD 0.44; a final unfranked distribution of 13 cents per security was declared.

• Average assets grew 7% to AUD 14.1 billion; financial assets rose 8% to $14.6 billion.

• Record loan originations of AUD 5.7 billion, up 4–5% from FY23.

Outlook and guidance

• Funding margin outlook for FY 2025 is positive, with recent term issues at lower margins and renegotiated wholesale funding terms.

• Expectation of continued portfolio growth despite economic challenges, with net interest margin stabilizing.

• Elevated customer hardship and increasing bad debts expected due to asset mix.

• FY 2025 payout ratio expected to be similar to FY 2024.

• Continued investment in automation and digital experiences to drive efficiency.