Borrowers are looking for tailored solutions
In the midst of challenging economic times, borrowers are increasingly looking for lenders who think outside the box, says La Trobe Financial’s Cory Bannister.
Bannister, the senior vice president and chief lending officer at La Trobe, said the company had experienced steady growth over the last 12 months as customers leant towards lenders who “really understand their situation and their circumstances and are able to provide a solution that meets their needs and objectives”.
He said during these “uncertain and complex times”, with living expenses and interest rates rising, customers “want to be listened to, and they want certainty of execution at the end of it”.
Bannister (pictured above) said La Trobe Financial was known for finding financial solutions for borrowers who wouldn’t typically be able to find them from the big banks and other non-bank lenders.
Currently about 70% of the loans La Trobe Financial handles are in the residential sector, and 30% are commercial.
The alternative asset manager and non-bank lender continued its strong growth of assets under management in the last financial year, reflecting its differentiated funding model. Bannister said the model was unlike many other similar operators in the market.
“We're different from other non-banks in that a sizable piece of our funding is raised by us, via our $9.3 billion AUM Credit Fund,” Bannister said.
“Our strength is being able to create tailored solutions for customers who don't easily meet an automatable criteria; the complex credit spaces are where we specialise.
“Also harking back to that funding differential, it means our solutions can look a little bit different to others.”
Bannister said many of the big banks and non-banks were funded by the same vehicles, so borrowers often ended up being presented with products and policies that looked very similar.
He said in the last 12 or 18 months, as banks tightened their lending conditions and interest rates affected investors, La Trobe Financial had been able to assist an increasing number of high-net investors access loans.
Thanks to the depth of La Trobe Financial’s offering, Bannister said the company was able to cater to loan sizes of up to $25 million, although that was not necessarily the loan size the company targeted.
“We have a really unique spot in the market where we can attract a really high-net worth customers with good levels of equity, who just need a solution in front of them.
“I'd say our sweet spot for residential loans is primarily under $3m, however a growing portion of our lending is in that $3m to $15m space.”
Bannister said loans in this range were primarily for commercial projects or luxury residential properties.
“[However] The way prices are going, especially in Sydney, it’s not so luxury to have a $5 million loan against a $8m home. An $8m home in Sydney is no longer a trophy, it’s par for the course in some suburbs – it’s crazy.”
Bannister said the residential investor buyer market was less impacted by rate rises than other buyers, with property prices currently less than they were at their peak, and rental vacancy numbers low, there were plenty of opportunities for them.
“Rents are also incredibly strong and likely to maintain strength over time and the housing shortage that we’re facing has been well reported.
“We're also seeing good demand from developers focusing on suburban infill. It’s where we do find a lot of lot of construction development – that small to medium size [properties].
“We don't do large CBD towers, but we can certainly fund that suburban infill, and we think that's a really important piece of the landscape going forward to address this housing issue.”
Bannister said while construction costs seemed to be dropping, labour remained an issue for the construction sector.
Earlier this year, Mortgage Professional Australia named La Trobe Financial one of the best mortgage companies to work for in Australia this year as part of its Top Mortgage Employers special report.
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