Australia’s largest asset finance services business, COG Financial Services Limited (ASX:COG), has reported a robust result for the first half of FY2023, in spite of tight supply and a higher interest rate environment.
Asset finance continues to be a star performer, with COG Aggregation recording a Net Asset Finance growth rate of 9 per cent, with $3.4 billion of net assets financed in H1 2023. On a like-for-like basis, it grew by 23 per cent.
Mark Rayson, Head of COG Aggregation, says the financial results reinforce the continuing appetite for asset finance and the resilience of the sector despite supply chain and economic challenges.
“Our network of brokers outperformed the most recent quarterly CAPEX data from ABS, which showed a 3.4 per cent increase in equipment, plant and machinery capital expenditure, compared with the previous corresponding period,” Rayson says.
Platform Finance, COG’s Strategic Partnerships business, recorded a 14 per cent volume growth during the six months. Damian Mantini, Head of Strategic Partnerships, says: “We anticipate this trend to continue as our broker base look to further diversify outside their core mortgage business. We continue to leverage our strong and significant broker market share in asset finance and are proud to have an estimated 21 per cent market share of broker originated asset finance lending.”
While cost-of-living pressures and rising interest rates are starting to impact the consumer lending side of the business, enquiry remains solid. “It’s certainly becoming more challenging when you look at conversion rates and margins, however the enquiry is still there; consumer volumes in the Dec quarter were 30% higher than the prior quarter,” Rayson says.
“Commercial lending has been particularly buoyant during the first half, which backs up APRA’s recent lending data that showed double digit growth in business credit in 2022, albeit trending down from the peak in recent months.”
In line with its growth strategy and to continue to meet customer demand, COG continues to invest in people and technology including:
- As part of the merger to create COG Aggregation, the business unit has increased its relationship and support staff.
- Further investment in more behind-the-scenes Operations and Compliance resources to support both brokers and funders.
- An in-house IT development team has been created over the past 12 months. “We recognise that technology is the solution to helping navigate the increasing complexity that brokers are dealing with, which is why it’s crucial to be at the forefront,” adds Rayson.
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