YBR told the market on Friday it will incur a statutory after-tax loss for the six months to 31 December 2018, via Financial Standard.
The results include a material non-cash impairment charge on the carrying value of the wealth management and lending business and various other assets across the group, it said.
However, the impairment will not affect the net present value of the group’s net trail commission receivable from its underlying mortgage book or book of insurance premiums under management, but will be applied against goodwill and intangible and other assets.
The charge results from assessing goodwill and other intangibles in light of recent events, including the Royal Commission, YBR said.”It is a non-cash balance sheet adjustment and has no impact on the underlying operations of the business.”
One of the Royal Commission’s final recommendations is to ban lenders paying trail commission to mortgage brokers and other commissions for new loans.
This should be enacted within two or three years, Commissioner Kenneth Hayne said. “The borrower, not the lender, should pay the mortgage broker a fee for acting in connection with home lending.”
YBR expects the audited half-year report to be lodged before the Corporations Act deadline of 15 March 2019.
It last traded at 5.4 cents per share, plunging from about 14 cents compared to a year ago, down more than 61%.
