AMP Limited

Good day and thank you for standing by. Welcome to AMP Half Year 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Blair Vernon, Chief Executive Officer of AMP. Please go ahead.

Thank you. Welcome to the first half 2026 results briefing for AMP. My first as CEO. I'm delighted to be joined today by our new CFO, Jackie Cleary. I'd like to acknowledge the traditional custodians of the land upon which we meet today here at AMP in Sydney, that is the Gadigal people of the Eora Nation, and I'd like to pay my respects to elders past and present. I extend that respect to the traditional custodians of the lands on which all participants on this call are joining from today. I'm going to kick things off with an overview of our first half 2026 results and also provide some brief context to our strategic focus and immediate priorities. Jackie will then discuss the results in more detail, including business unit performance, key metrics, and also our revised FY26 guidance. I will then conclude with a brief summary of our immediate priorities for the second half of 26. We'll then open to Q&A as usual. The impact for the half is up 33% to $174 million. A result that reflects the growing contribution of our China partnerships, which collectively delivered more than double the impact contribution when compared to the first half 2025. Notably, CLPC also lifted its dividend payout again compared to FY25, up 41%. Statutory profit is up 57% to $154 million, reflecting the continued simplification of our business and the removal of significant one-off items below the line. During the half, we returned more than $200 million to shareholders through a mix of dividend and buybacks. Today, we announce a further on-market buyback program of another $150 million, reflecting the strength of our cash generation and capital realization strategy to benefit our shareholders. In addition to this new buyback, we are also announcing a $0.03 interim dividend today. Platform's cash flows were over $3 billion for the half. and our S&I business delivered a positive cash flow result for the first time in nearly a decade. Our overall AUM increased to over $167 billion. Our key wealth operating units continue to deliver genuine momentum and operating leverage as we execute on our clear strategy to make a difference to retirement outcomes for everyday Australians and Kiwis. I want to briefly recap on our core strategic focus and the progress we have made against this thesis in the first half. We've outlined a clear focus to organically grow our portfolio of wealth management businesses given the attractive dynamics of these operations and our relative opportunity. We aim to deliver great retirement solutions to customers in each of these markets. At the same time, we are continuing to accelerate the transition of our AMP Bank Go solution and execute on our capital release plans within our banking business. We also continue to pursue the realization of non-strategic partnerships and minority interests as market opportunities present. The three jurisdictions where we have wealth exposure all share attractive demographic conditions, making saving for retirement a national priority. In Australia, we have long celebrated the accumulation settings that see a market with well over $4 trillion in savings. and now a recognition that the shift to retirement incomes and wealth transfer is a significant latent opportunity. In New Zealand, there is now a growing acknowledgement that the model of compulsory participation and increased contributions from the current voluntary 3.5% rate is a key to future prosperity, creating a prospective fresh tailwind in this market. Our longstanding partnership in China operates in a market where 12% contributions are the norm in Pillar 2. with an addressable market of well over 100 million citizens. The pillar three opportunity, which is in its infancy, with an addressable market of over half a billion citizens, again represents an ongoing positive growth opportunity in this market. Our 2026 priorities are set against a simple and clear focus on three thematics. Accelerating growth in our wealth businesses, increasing cash generation and returns to shareholders, and leveraging the opportunities from AI while simultaneously managing the rapidly emerging risks. First half 26 saw continued positive momentum and our growth ambitions across wealth. Our lifetime solutions reached new milestones across both our North platform and our AMP super business with collectively more than $21 billion invested in these solutions. Our AMP super business delivered top quarter returns for members, cementing our superior returns relative to most funds across one, three, five, and seven years. Our North Roadshows in the first half showcased the new North Interactive Wealth Portal to more than 500 advisors and revealed the powerful AI workbench we are deploying to unlock advisor efficiency and productivity, already saving up to two hours per client review. That translates directly into advisors having more capacity to see more clients. In New Zealand, we continue to deliver growth in cash flows with great underlying economics, while our long-standing partnerships in China equally show a growth curve and operating leverage which is compelling. Increasing our cash generation and creating the capacity to maximize returns to shareholders is central to our growth strategy. In the first half, we increased underlying impact and also reduced below the line items, boosting statutory impact significantly compared to 1H25. As we drive the transition of deposits to our new Go platform in the bank, we anticipate emerging cost efficiencies alongside the opportunity to accelerate capital release from the bank itself. Continued utilization of DTAs added to our performance metrics. allowing us to return over $200 million to shareholders in the half. Like all businesses, we're balancing both the opportunities and the risks from AI. And through the first half, we sharpened our focus on both offense and defense. We see significant opportunities in North as we build and deploy a comprehensive set of AI capabilities designed specifically for advisors operating in the Australian marketplace to drive efficiency that will make a difference for them and their practices. We're already seeing benefits in product development lifecycle management, and our ambition in the second half is to advance our end-to-end simplification of corporate functions, leveraging AI, rather than simply deploying agents to replicate current workflows. While we see clear benefits, we're also expanding our defensive posture, especially in cyber defense, tech fin ops, and also governance and training, all of which demand concurrent investment and are being managed inside our guided cost envelope. Our ability to pursue growth competently is built on a foundation of carefully executed transformation over the past few years, where our investments have been directed towards simplifying the business, resolving legacy matters, and improving our investment spend to build operating leverage in our wealth businesses. That capability is predominantly directed at delivering retirement solutions for clients in each of our target geographies, which all continue to benefit from enhanced public policy developments in the main. We have a portfolio of wealth businesses with strong cash generation profiles and we see significant further capital release opportunities in our banking business and across non-strategic assets, presenting attractive dividend and buyback prospects as we look forward. I'll now hand to Jackie who will walk you through the results in some more detail.

Thank you Blair and good morning everyone. I'll now take you through AMP Group's financial performance for the first half. Underlying NPAT increased 33% to $174 million. Importantly, growth was broad-based, with our wealth businesses contributing more than 75% of underlying NPAT. Statutory NPAT increased 57% to $154 million, driven by lower litigation, remediation and business simplification-related costs. Revenue grew faster than cost in the half with revenue up 6% while controllable costs were up 4%. As a result, the group EBIT margin improved by 2.5 percentage points to 30.7 and the cost to income ratio improved to 60.5%. Return on equity increased to 9.8% and earnings per share increased 33%, reflecting stronger earnings and ongoing capital management. Across the group, the business generated $236 million of surplus capital during the half. Of that, we returned $201 million, or 85% of that surplus capital, to shareholders through both dividends and buybacks while maintaining a strong capital position. We also utilized a further $56 million of deferred tax assets, reducing the remaining on-balance sheet net DTA balance to 418 million. The combination of capital generation and DTA utilization continues to support shareholder returns and capital flexibility. The growing contribution from our capital light wealth businesses supported continued capital generation, which increased group surplus capital to 322 million. That has enabled today's announcement of a further 150 million of an on-market share buyback alongside an interim dividend of 3 cents per share, 20% francs, which is up from previous guidance of 2 cents per share. Our focus remains on disciplined capital allocation, balancing investment, capital returns, and maintaining a strong balance sheet. While the half included some period-specific items, The key feature of our result was stronger earnings from AMP's wealth and retirement businesses. Platforms and super investments delivered higher profits and expanded EBIT margins as assets and cash flows grew. China partnerships contributed $56 million, more than double the prior period. Together, these businesses contributed more than 85% of group underlying impact. We will continue to realize capital from non-strategic partnerships where opportunities arise. And finally, AMP Bank's results reflect investment in scaling AMP Bank Go and capital release transactions. Each of our wealth businesses contributed positively from prior half. Platform delivered record net cash flows, up 33%. Super and Investments recorded its first positive net cash flow since 2017. New Zealand continued to perform strongly, up 20%, while China Pension AUM continued to grow, up 9% on the half. Turning now to the performance by business units. Platforms delivered strong growth, with underlying NPAT increasing 15% to $61 million. Record net cash flows of $3.1 billion demonstrate the continued momentum in the business. Revenue grew faster than costs in the half, with revenue up 6%, controllable costs up 2.5%, and EBIT up 18%, demonstrating operating leverage. With scale benefits emerging, the cost to income ratio improved to 53.5% and return on tangible equity increased to 32.9%. Let me spend a moment on the underlying drivers of that performance. In the 2025 NMG Australian Wealth Advisors Study, North was rated the number one platform across a number of categories, including advisor proposition, Retirement, Reporting, Price Competitiveness. We were joint first in digital experience and rated number two for technology. Our AUM is currently 80% weighted to superannuation and retirement, where recent policy changes favor wealth creation via super, which we are well positioned for, creating stability and consistency. During the half, we added 74 net new advisors to North, with fewer greater than 1 million, and signed 38 new AFSL agreements. My North Lifetime continued to gain traction, growing to 1.2 billion. Revenue margins remained stable at 41 basis points, consistent with the second half of 2025, reflecting ongoing management actions. EBIT margin grew from 39% in FY25 to 42% this half. Closing AUM reached $92.7 billion with a diversified mix and continued strong growth in managed portfolios. Super and investments underlying NPAT increased over 18% to $32 million. Top quartile investment returns for members assisted with net cash flows turning positive for the first time since 2017. Revenue grew faster than costs in the half, with revenue up 5%, controllable costs up 1%, and EBIT up 21%, demonstrating operating leverage. The cost to income ratio has improved by 3.6 percentage points, and we see opportunity for further improvement Given we have modernized the technology that underpins the super business. Finally, return on tangible equity increased by 3 percentage points to 19.9%. AUM-based revenue margins remain stable at 61 basis points, consistent with the second half of 2025. EBIT margin increased to 23%, demonstrating improving scale economics. Closing AUM reached $62.6 billion with a diversified mixed and continued growth and employee MySuper. Now on to New Zealand. New Zealand Wealth delivered a resilient result. Underlying NPAT was $18 million, down 5% in Australian dollar terms but up 5% in local currency. Net cash flows increased almost 20% to $116 million. Driven by KiwiSaver inflows and lower outflows. Cost discipline remains strong with a cost to income ratio of 39%. Now on to partnerships. I'll come back to China shortly. Other partnerships benefited from 18 million pre-tax carried interest from Digital Bridge, which we announced last month. This is largely offset by downward revisions in sponsor investments. Investment income increased on higher average cash balances and favorable rates. Lower interest expense followed the repayment of our 275 million AT1 notes late last year. Non-strategic assets remain a source of potential capital realization over time. Our China partnerships continue to build momentum and are a meaningful contributor to AMP's earnings. China Life Pension Company remains the largest participant in the Pillar 2 market for trustee services with around 30% market share. For AMP, this is a capital life business with growing earnings and cash returns. First half contributions more than doubled this past year to 56 million. CLPC and CLAMP now have dividend payout ratios of 41% and 40% respectively. Growth in AUM and improved efficiency increased our annualized return on investment to 16%. This means AMP is realizing value through earnings and dividends, not just growth in carrying values. Let me spend a moment on the underlying drivers of that performance. At CLPC, pension AUM has grown at a 12% CAGR since 2021 to a NIMBY 2.6 trillion. Over the past two years, the cost-to-income ratio improved from 55% to 45%, while the dividend payout ratio has increased from 30% to 41%. Growth continues to be supported by ongoing pension reform. which is expanding participation both across workplace and personal retirement savings. At CLAMP, AUM has grown to more than renminbi 400 billion supported by strong investment capabilities and extensive distribution reaching more than 75 million retail customers and 95,000 institutional clients. These businesses continue to grow at scale while generating increasing cash returns. At AMP Bank, our focus remains on improving the funding mix through AMP Bank Go and increasing capital efficiency. Returns remain below where we want them to be, so we're prioritizing these actions ahead of balance sheet volume growth. AMP Bank Go deposits increased to $1.7 billion, 70% of which are new customers. And we closed the legacy deposit platform to new businesses half to realize future cost synergies. We're seeing the first benefits in funding costs, although AMP Bank Go remains a relatively small part of total funding today. Mortgage growth remained disciplined. reflecting our focus on risk-adjusted returns and margin rather than volume. NIM was broadly stable to year-end at 1.25%, with funding improvements largely offset by securitization and balance sheet optimization. You can see the NIM bridge in the appendix for further details. Our focus remains on execution, growing AMP Bank Go deposits, simplifying the operating model to realize cost savings and further improving capital efficiency. This page demonstrates the progress we're making on improving capital efficiency at AMP Bank. While the loan book was broadly stable, risk-weighted assets reduced, improving the capital efficiency and increasing the CET1 surplus to 89 million. above our 10.5 target midpoint. Importantly, our objective is not simply to accumulate surplus capital at the bank. It's to improve capital efficiency within the bank while also increasing flexibility in how capital is allocated across the group. While there is more work to do, we continue to see opportunities to improve capital efficiency and we will continue to evaluate all capital management options through a shareholder value lens. Turning to FY26 guidance. Our focus remains on the key drivers of sustainable earnings growth, which are net cash flows, operating leverage and capital generation. In wealth, our focus remains on growing AUM while maintaining disciplined margins which are consistent with our prior guidance. In AMP Bank, the focus is on execution, growing AMP Bank Go deposits, simplifying the operating model to realize cost savings, and improving capital efficiency. We expect these actions will continue to put pressure on earnings in the near term, similar to the first half, with NIM expected to remain broadly stable at 1.25%. In partnerships, We continue to see strong growth in AUM and cash returns. As a result, we're increasing guidance to an annualized 12% to 15% return on investment across the portfolio. Controllable costs are expected to be in line with prior guidance. Today's additional buyback and dividend take the FY26 pro forma capital returns to $425 million. The board will review the final dividend at FY26. Across the group, we remain disciplined on costs and capital allocation with a continued focus on growing higher quality capital efficient earnings. Now I will turn it back to Blair.