• Normalised net profit after tax decreased 12% to $15.0 million
• Collective provisioning increased 18% to $54.3 million
• Operating profit (NPBT before impairment) increased 20% to $35.9 million

Resimac Group Limited (ASX:RMC) has provided a trading update for the first half of 2025 (1H25). The Group's normalised net profit after tax (excluding fair value movements on derivatives) for the period was $15.0 million, a decrease of 12% from $17.1 million in the previous period (2H24). This reduction was largely due to a significant increase in collective provisioning, particularly within the asset finance business. During the period, the asset finance portfolio experienced an increase in arrears and recorded net write-offs of $6.5 million, compared to $2.9 million for the previous period. In response to this and the current economic conditions, the Group has raised its provisioning coverage for both the Home Loans and Asset Finance businesses from $46.1 million to $54.3 million, marking an increase of $8.2 million (18%) in the period, and therefore maintaining a prudent approach to provisioning. While normalised net profit after tax for the first half is lower than expected, operating profit (NPBT before impairment expense) has increased by 20%, from $29.9 million to $35.9 million. This increase is due to the growth in Assets Under Management (AUM), with higher net interest and fee income accompanied with disciplined cost control. The Group remains confident that it will achieve operating profit (NPBT before impairment expense) consensus and continue to capitalize on the positive settlements and AUM momentum.

Based on the recent experience with arrears, net write-offs, and the subsequent impact on collective provisioning, it is probable that the Group will not meet NPAT (excluding FV movements on derivatives) consensus for FY25.