Australian Finance Group (AFG) reported a 39% year-over-year increase in net profit after tax to $49 million for the full fiscal year 2026, driven by diversified earnings and reduced volatility in its revenue streams.
Group EBITDA rose 32% to $74.4 million, while underlying return on equity climbed four percentage points to 23%. The cost-to-income ratio improved by four points to 55%, moving closer to the company’s sub-50% target. Gross profit reached $159 million, up 12% from the prior year, with operating cash flow increasing 42% to $51 million and a cash conversion rate of 94%.
The company’s diversified income model now supports 90% of earnings through recurring sources such as trail commissions, subscription services, and lending book activities, up from 10% derived from residential upfront commissions. Broker services subscription income expanded 13% to $24 million, while gross profit per broker rose 12% to $43,000.
AFG’s manufacturing segment gross profit surged 52% to $45 million, with EBITDA more than doubling to $33 million and a return on equity of 30%. The distribution business gross profit grew 2% to $115 million, maintaining an underlying ROE of 40%. The AFG Securities book expanded 30% to $7.1 billion, exceeding the company’s mid-cycle aspiration of 120 basis points for net interest margin, which reached 125 basis points at year-end.
Net interest margin expanded by nine basis points to 125 basis points, with an exit rate of 128 basis points, surpassing the through-the-cycle target. Term issuances totaled a record $2.2 billion, while capital investments for growth amounted to $21 million, allocated across AFG Securities, technology, and broker investments.
The company declared a final dividend of 4.8 cents per share, maintaining a payout ratio of 60% of adjusted net profit, within its 50-70% target range. Shareholder returns included $30 million in dividends and a $15 million buyback program, with $3 million of shares repurchased to date. AFG held $63 million in unrestricted cash and reported a trail book net asset of $84 million.
Credit quality remained stable, with arrears at 1.7% including hardship accounts, and lifetime losses under 1 basis point on $19 billion settled since 2007. Expected credit loss provisions stood at $4.6 million, with 95% of the loan book showing no adverse credit indicators.
Loan settlement volumes grew across segments, with residential settlements up 18% to $75 billion, asset finance settlements rising 19% to $4.3 billion, and commercial mortgage volumes increasing 24% to $6.3 billion. The residential loan trail book reached $232 billion, marking 22 consecutive years of growth.
AFG’s broker network connects over 4,300 brokers with 80 lenders, accounting for one in nine residential mortgages in Australia and 81% of new residential lending, up from 50% in fiscal 2016. BrokerEngine subscribers grew 19% to 4,400, with 59% of brokers writing multiple products. The company has invested in six broker groups, tracking toward a target of 35 by fiscal 2029.
Market share for AFG Securities reached a record 5.3% of residential settlements in FY26, while the non-bank lending share rose to 13%, above the long-term average of 11%. Broker group growth outpaced the broader market by 2.5 times, though post-budget trading saw residential lodgements decline 16% in early May.
