CEO shares lending performance update
First Mortgage Trust (FMT) CEO Paul Bendall (pictured above) announced a robust annualised pre-tax return of 7.44% for September, outpacing falling bank deposit rates.
“We anticipate maintaining a strong premium over bank deposits,” Bendall said, attributing the high returns to flexible loan pricing strategies that are independent of the OCR.
This approach allows for higher rates, even in a decreasing rate environment.
Expanding lending volume as market recovers
Bendall also highlighted the fund’s capacity to expand lending volumes as the property market rebounds.
With cash reserves at the higher end of their target, the fund is well-positioned to increase lending, which will support stable returns in the coming quarters.
“We’ve been holding cash reserves strategically, and now, as lending opportunities increase, we can adjust these reserves to keep returns strong,” Bendall said.
Lending shifts away from banks: A key growth strategy
The fund is seeing a shift in borrowers moving away from traditional banks.
“This trend is central to our long-term strategy,” Bendall said, pointing out that more borrowers are seeking flexible, personal lending solutions.
This shift aligns with international trends and strengthens the fund’s position as a competitive alternative to major banks, offering more tailored loan options.
Diversified loan portfolio and strong risk management
FMT’s well-diversified loan portfolio, consisting of more than 600 loans secured by nearly 1,700 first mortgages, ensures stability in returns while mitigating risk.
“Unlike smaller, riskier investments, our diversified approach protects investors’ wealth,” Bendall said.
Additionally, the fund’s reserve continues to grow, providing a buffer against potential loan defaults, further ensuring consistent performance and capital protection.
Increased borrower activity as rates fall
Despite challenging economic conditions, Bendall is optimistic about the lending pipeline, with increased borrower activity due to falling interest rates.
“We are seeing strong lending opportunities, especially from borrowers transitioning away from bank funding,” he said.
This positive trend is expected to continue, contributing to long-term growth and stable returns.
Investor meetings to discuss fund performance
Bendall expressed his gratitude to investors for their continued trust and announced upcoming in-person meetings in Waikato and Bay of Plenty. The meetings will feature economist Tony Alexander and provide an opportunity to discuss the fund’s performance and outlook.
“We are committed to maintaining consistent returns and staying connected with our investors,” Bendall said.
FMT remains focused on reliable returns
As FMT moves forward, Bendall reassured investors that their capital remains in safe hands.
“Your trust in us is something we don’t take for granted,” he said, emphasising the fund’s commitment to delivering stable and consistent returns, regardless of market fluctuations.
Read the FMT announcement here.
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