MA Financial Group, which completed the acquisition of Finsure last month, is pushing further into the mortgage market, announcing that it has taken full ownership of residential mortgage lender MKM Capital.

MKM claims to specialise in lending to customers who “require a flexible alternative” – non-prime and near-prime credits, small business owners, expats and owner-builders.

It has been lending since 2004 and MA Financial acquired a 47.5 per cent stake in 2020. It has paid A$11.4 million to acquire the remaining 52.5 per cent interest.

MA Financial joint chief executive said in a statement that full control of MKM will enable MA Financial to step up its growth in the residential mortgage market.

MA Financial entered the lending market in 2018 as a speciality lender, providing legal disbursement funding, which it funds through income focused managed investments. In recent times it has added residential mortgage lending to the mix.

In the 12 months to December 2021, its loan portfolio grew 44 per cent to $455 million. Net interest income grew 30 per cent to $19.9 million and underlying EBITDA grew 13 per cent to $10.3 million. Lending contributed 10 per cent of group EBITDA.

The lending business generated a healthy net interest margin of 5.3 per cent in 2021. NIM came down from 8.8 per cent in 2020, reflecting the change in the portfolio mix from speciality finance to residential mortgage lending.

Last month, it paid $145 million to acquire mortgage aggregator Finsure from BNK Banking Group. Finsure’s aggregation business supports more than 2000 brokers and has a $60 billion loan book.

The company’s view is that non-banking lending in Australia will grow as a proportion of overall lending and the company is building a platform that will allow it to compete on a substantial scale.