RESIMAC GROUP LTD — AGM Information 2011

Nov 24, 2011

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Chairman’s Address to Homeloans AGM 2011

Ladies and gentleman, welcome to the Homeloans AGM for the financial year 2011 - our 11th AGM as a listed entity as we celebrate our 26[th] year of operation.

My name is Tim Holmes, and I am your chairman.

Let me introduce to you my fellow directors:

• Robert Salmon;

• Robert Scott; and

• Drew Hall

Brian Benari is unable to be with us today and has sent his apologies.

As Homeloans shareholders, you will appreciate that the mortgage lending and credit market during the 2011 financial year was not without its challenges – both in Australia and overseas.

Homeloans, however, has never been shy of turning challenges into opportunities. As one of the largest non-bank lenders in Australia, we continue to deliver solid half year and full year financial results – results which are testament to our consistent and stable operating earnings performance over the past three financial years.

Despite the challenging market conditions, during the 2011 financial year, lending volumes of Homeloans branded products increased 21%, which resulted in a 10% increase in net fee and commission income to $16.1m compared to the previous financial year. This is particularly pleasing given the current level of competition for mortgage lending.

Our growth in lending volumes was supported by a national brand building advertising campaign, which whilst accountable for a 4% increase in total operating expenses, has been successful in terms of driving traffic and brand awareness.

For the year ended 30 June 2011, Homeloans recorded a statutory net profit after tax of $9.2m, down from the previous financial year result of $12.3m. This decrease was materially attributable to our return of 35 cents per share to shareholders (totalling approximately $35.7m) via a reduction in capital in September 2010, which reduced our interest income.

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Normalised net profit after tax and after adjusting for the capital return and non-cash adjustments was therefore $8.1m, representing a decrease on the previous corresponding period result of $8.4m. This decrease has been driven by ongoing margin pressures, with no foreseeable improvement in the near term.

The Board has declared a fully franked final dividend of 3.5 cents per share, in line with the 2010 final dividend, bringing the total to 6 cents per share for the year, fully franked.

Our financial foundations are firm despite having returned $35.7m of capital to shareholders during the year. We’ve maintained good levels of residual cash reserves which continue to be supported by strong operating cashflows thanks to underlying earnings.

Homeloans also remains free of any recourse debt facilities. We believe the ongoing cash reserves will be more than sufficient to meet our ongoing funding requirements, including future business development, investment and maintaining the company’s onmarket share buy-back scheme.

According to our independent research, a range of combined marketing activities featuring rugby league legend Shane Webcke, plus Matthew Pavlich, captain of the Fremantle Dockers, has seen awareness of the Homeloans brand increase by 53 per cent nationally. We are confident that this substantial increase in awareness will result in greater responses to future marketing activities and, therefore, additional sales.

We continue to seek opportunities to grow our lending volumes, including working very closely with our wholesale funders to improve and expand our product offering. Product innovation is critical, particularly in the current environment, and we expect to make further progress in this area over the year ahead.

Another key area of focus for Homeloans during the 2011 year has been the continued strengthening of our relationships with key broker partners across our third party distribution network. We are committed to further building on these and leveraging existing relationships to help drive greater levels of repeat business. Indeed, this is an area of significant opportunity for us.

We have also focused on ensuring we deliver a very high standard of service to our broker network. During the year we developed the “Elite Broker Circle”, a preferred broker service platform designed to build deeper relationships with our key broker partners.

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Of course during the year we have been impacted by the government, regulatory and economic landscapes.

For example, we have faced significant legislative challenges, such as the federal government’s abolition of exit fees for mortgage lending products, and the introduction of the National Consumer Credit Protection legislation. At the same time, housing credit growth rates moved to 25 to 30 year lows, thus intensifying competition from the major banks.

The abolition of exit fees, for example, is not without its challenges. These challenges, however, are outweighed by the strong opportunities they bring. The existence of exit fees had historically created a competitive disadvantage for some lenders, and their removal will create a more level playing field and transparency of mortgage product offerings. Further, continuing channel conflict is evident between the retail and third party distribution arms of the major retail banks and this provides greater scope for brokers and consumers alike to engage with our business.

We continue to focus on improving operating efficiencies, including streamlining our front end application and credit approval processes. As part of this focus, we recently undertook a review of our business structure, resulting in some positive, changes.

Over the next 12 months we also expect to see further consolidation within the second tier and non-bank sector, and Homeloans is actively looking for acquisition opportunities. With fewer brands in the marketplace, this strengthens our position as a genuine alternative to the major banks.

In summary, we are proud of our achievements over the past 12 to 18 months and look forward to continuing our business strategies which support our proposition to provide a very real, respected and refreshing alternative to the major banks for home finance. .

In closing, I wish to thank my fellow Directors and the staff of Homeloans Limited for their diligence and hard work throughout the year.

Thank you. I will now move to the formal meeting.

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