The survey, of non-bank lenders, says the sector has put the GFC behind it and its challenge has shifted: “From managing the difficult credits in their portfolio to managing margins and growth in light of a competitive lending environment that is at last starting to show some ‘new’ opportunities.”

Bank competition remains a challenge for the sector, it says, and there is margin pressure, especially as banks move more and more into products that compete directly with non-bank lenders.

Regulation has also proved a burden – non-bank executives told the survey that AML rules in particular had created extra compliance cost.

But the survey said the loan-to-value restrictions recently introduced by the Reserve Bank could be an opportunity.

“As bank lenders are required to limit the LVR ratio of their mortgages with customers, those customers may turn to non-bank lender to help finance deposits require don houses or other assets which they might otherwise pay for with cash so as to grow their deposits.”

Non-bank lenders are not restricted in the same way as mainstream banks, which have to keep their low-deposit lending to no more than 10% of their new loans.

The report said this should provide the sector with a bit of room to move. “This could help combat some of the margin pressure experienced due to competition with banks on mortgages or more likely offer an opportunity in the higher LVR space for non-banks to participate.”

But it said banks might also be tempted to try to bolster their loan books by moving into areas that had previously been primarily serviced by the non-bank sector.

Or, they could leave mortgages strictly for home lending and not encourage borrowers to use any equity headroom to purchase other assets. If that were the case, more people might turn to other institutions for things such as home renovations or purchasing vehicles.

Finance companies’ net interest income increased by $18.9 million over the 2013 year but non-interest income decreased by $20.4 million. There was a total decrease in net profit after tax of 53.9%.

The savings institution sector reported a small drop in net profit after tax. Its result of $5.95 million was down 11.7% from the previous year.