Liberty Financial Group (LFG) H2 2024 earnings summary

Executive summary

• FY 2024 reflected a challenging and competitive environment, with net interest margin compression but continued portfolio growth through diversification.

• Investment grade rating was upgraded to BBB, and return on equity reached 11%; strong broker and customer NPS maintained.

• Ongoing investment in digital customer experience, including the launch of a customer app.

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

Financial highlights

• Underlying NPATA was AUD 132 million, down 29% year-over-year; net revenue was AUD 583 million, down 1%.

• Net interest margin declined to 2.51%, down 25bps; cost to income ratio rose to 28%.

• Distribution per security was AUD 0.25, down 44%; payout ratio was 66% of NPAT.

• Average assets grew 7% to AUD 14.1 billion; record loan originations of AUD 5.7 billion, up 5%.

• Impaired loans increased 56% to AUD 309 million.

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.

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

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