Centrepoint Alliance’s insurance premium funding arm has posted a 41% drop in pre-tax profit to $1.5 million for the six months to December 31.

Interest income for the half was $8.5 million, down from $8.8 million in the corresponding period of 2013.

Expenses grew 15% to $7.9 million, driven by higher borrowing costs and investment outlays linked to the new relationship with Steadfast, staff movements and rebranding of the mortgage business.

Revenue dipped 1% to $9.5 million, affected by a more competitive WA market.

“Investments we have made in our people and the future growth of our business have affected our half-year results,” Centrepoint Alliance Premium Funding CEO Bob Dodd told insuranceNEWS.com.au.

Centrepoint says efforts to grow the east coast business are yielding results, with the number of originated loans from the region up 24%.

The distribution agreement with broker group IBNA has been renewed for another two years, and Centrepoint has signed a new distribution deal with Steadfast Group.

“We are delighted by the underlying performance of the business and the growth we are seeing,” Mr Dodd said. “I am excited about proving our capabilities with some of our new broker relationships.”

He says the commercial market will remain soft this year.

“This will affect segments and geographic regions differently depending on the economic cycle of their state, industry and whether SME or corporate.”

Centrepoint Alliance’s group pre-tax profit improved 64% to $3.6 million, but total revenue fell 5% to $26.1 million.