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.

Thanks, Jackie. I want to wrap up with a brief pricey of our key priorities through the second half. which are hopefully unsurprising in that we are aiming to do simply more of the same. We plan to continue to extend our innovation in retirement and leverage the clear momentum we have. That includes our expanded sales capability which we are continuing to invest in. We're excited about the imminent launch of AI Implement in North that will deliver another significant efficiency gain for advisors and their practices in client interactions. We are well advanced on the rollout of brand new digital capabilities for our AMP super members including an entirely new app which will complement our award-winning digital advice capability. We will continue our capital release program in AMP Bank and also accelerate our efficiency program as we scale, go and reduce costs in the rest of the bank. All of which contributes to a growing capacity to return further dividends and capital to shareholders. While we're seeing broad efficiency gains internally as we deploy more agents across the whole of the enterprise, we also continue to invest proactively in risk management, especially in the areas of cyber defenses, but also to ensure we have tight financial controls across our entire AI estate. Through the second half, we're kicking off a broader review to ensure AI deployment can yield sustainable efficiencies that drop to the bottom line in future periods. They wrap up our summary of the first half results. We'll now open it to Q&A.

To ask a question now, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. A moment for our first question. And our first question comes from the line of Simon Fitzgerald from Jefferies. Please ask your question, Simon. Your line is open.

Hi there and thank you for taking my questions. I've got two. I might direct those to Jackie if I could, please. Just firstly on the chart and partnerships, obviously experiencing a really decent shift in momentum there and now meaningful component of group earnings. First off, 26, there's been an acceleration again up 107%. I was just wanting to see if you could outline if there was anything sort of unusual or one-off in nature or anything sort of less than usual in that result, you know, or is it mainly sort of operational driving that?

Thanks, Simon. I certainly don't see anything as one-off, but why don't I just turn it to Blair to kind of directly answer that.

Yeah, day 14 for Jackie.

Thanks, Simon.

She's got 14 days to... to observe that detail. But no, I mean, as Jackie said in the presentation, you know, that growth is really operating leverage. You know, the cost to income fall in the last two years of 55 to 45 reflects that leverage. And you can see the AUM growth. That AUM growth is particularly driven out of pillar two, as we've said consistently for some time. That continues to essentially mirror the contribution rate of Australia, but it's clearly a massively larger addressable market. Pillar 3 remains that growth opportunity but it's in its infancy and so we don't see one-offs we just see a continuation of growth.

Yeah good fair and then just on the bank with the securitization program I think I can see there was 2.3 billion in securitization activity I think that's a 1.4 billion net increase from FY25 to first half 26 but just um How should we think about that in terms of a level of capital release? I've generally sort of thought about this in the past to say $1 billion in securitization equates to around about $30 to $50 million of read up capital. Is that the right way to think about it? And then maybe you can sort of touch on, you know, how much is sort of in your public trust and what sort of mechanisms you're using through sort of private spheres in terms of securitization there.

Yeah, thanks, Simon.

You go, Jackie.

I'll take that one. So in the half, we did $2.3 billion in securitization-type activities. $1 billion of that was in public RMBS. We had $1.1 billion in our warehouse, which is our warehouse for capital relief. And there was an additional approximately $200 million in kind of top-ups to that warehouse during the half. some of which was actually quite late in the half, which you might have seen in the bank's results in terms of elevated LCR and CET1 ratios. So that's the kind of breakdown across public versus the warehouse. To the first part of your question, I think it's broadly in that range. I would think about a billion dollars of securitization activity equating to between 30 and 40 million. as that drops. So that's in the right ballpark. It's probably 30 to 40.

Okay, good. And if I could just ask one more question just in regards to the sort of momentum shifts that we're seeing in S&I and also the platform. Can you sort of talk to how much is you're seeing in terms of from external customers versus your existing customer base?

Yeah, maybe I'll pick that up. really pleased with the momentum across both platforms and SNI and in platforms we continue to see broad-based support both from advisors who are part of the acumen network so part of the former advice licensees or AMP advice licensees but also increasingly from IFAs in the market so both of those dimensions are delivering and we obviously are continuing to onboard new advisors so if you If you go back to that platform slide, I think we added 74 new advisors with more than 1 million AUM in the half. I think that's a sort of a 3x increase from the first half 25. So that momentum keeps building. So that's encouraging. In S&I, clearly, you know, very important milestone to get to a positive first half cash flow. We are seeing a couple of things there. We're seeing new accounts opened, so the appeal of our proposition, returns, digital, everything else, is seeing more digital uptake, so significant increases online. But we're seeing renewed engagement and interest from employers. In fact, we've been That's really important for members in those schemes. Great, thank you. Thank you.

We will now take our next question from the line of Julian Braganza from Goldman Sachs. Please ask your question, Julian. Your line is open.

Good morning, guys. Just the first question from me, just on the partnerships line. If I look at your guidance, you've restated the growth from 10% growth per annum to 12% to 15% ROI. So you've gone from a growth measure to an ROI measure. I just want to be clear on why that's the case, particularly given we're coming from a period of very strong growth. I just want to understand how you're thinking about this over the medium term, just from a growth angle.

Yeah, we've obviously, we haven't really re-based the way we're expressing that. I think we've always typically expressed it as a return on investment. But we have obviously grouped all partnerships together, so it's not simply China. We're considering the divisional treatment of China as we go forward naturally. but when we look at FY26, our starting point guidance of 10% return through the year, actually we'd express it through the cycle, we're seeing clearly further upside in 26, hence that adjustment of 12 to 15%. There's obviously a bit of range in there but it's clearly upwards from where we were.

But if I assume 12 to 15% ROI and I assume a growing carrying value, I'm not getting massive growth in China partnerships from here in my forecast. So I'm just wondering, is that guiding to a more moderate growth rate from here or should we be thinking about that?

No, I don't think so. But look, I've got Adrian Ryan here with me as well along with Jackie. Obviously, Adrian was our acting CFO through the period. He's now got a significant role in our China partnerships. I might get Adrian just to fill in the details there.

Hi, Julian. When you look at the valuation and the modeling, just be conscious of dividends come out of the investment as well. So as we grow the equity in those JVs, we offset the dividends as they come out. So that's probably why you're seeing that.

Okay, got it. Okay, that makes sense. Okay, and then maybe just a second question on the bank. Can I just understand how much capital can be released from the bank from here? I can see that the ROE is 3.6% for the half, but even if I strip out just the one-off costs associated with AMP Bank Goal, which I think is about $10 million for the half, I'm still getting a pretty weak ROE versus PCP. So I want to understand what is the benefit from the capital efficiency initiatives, and when will that come through, and what is the sort of quantum of benefits that could come through from here as well? Thanks.

Yeah, thanks for the question. Look, as Jackie just mentioned, for every billion that we securitise or get capital relief on, that's sort of in the range of 30 to 40 million. In terms of the scale, we're continuing to evaluate how much to scale that and that's a key piece of work for us as we've been working through the first half. We've obviously accelerated that momentum in the first half and we would anticipate that continuing. There is clearly I mean, as you will have seen in the marketplace, plenty of interest in a whole range of structures and strategies for capital relief. And so that continues to encourage us in terms of the breadth of opportunities that we have and the potential scale there. And so, you know, we'll continue to work on that through the second half and update the market accordingly.

Okay, got it. And then maybe just a final question on the investment income. So I know you benefited there from, I think you said from higher group cash as well as higher interest rates. Correct me if I'm wrong, but I just wanna understand the sustainability of that 25 million from here. Yeah, thanks.

Yep, yeah, a perfectly valid question. Look, it did benefit, you're right, it did benefit from both dimensions. Yeah, liquidity is well above our sort of planned number and there's a couple of reasons for that. One, we've obviously seen more receipts than we anticipated and so we would intend to see that return closer to our target over time and so obviously the announcements were made now in terms of buyback and We've got some debt maturing later in the year. We'll evaluate that at the time. That's potentially going to soak up some of that. So generally, I would see that investment income tracking downwards from here based on balance.

Okay, got it. And so it's the last question for me in terms of dividend. Is your guidance still for two cents per share? All the next few halves, given the higher payout ratio coming through from China, the higher growth coming through from China, and also just the higher payout ratio this half, the $0.03 per share, what's your guidance for out-of-year dividends at the moment?

Yeah, so I guess that's a key revision for us at this point. So as we've announced, a $0.03 interim dividend as we are at the present point in time, the board's going to review the final dividend and look at FY26. So essentially that new position essentially replaces that prior guidance with our three cent interim dividend being the starting point.

Got it. Thanks so much for that, guys. Much appreciated.

Thanks, Julia.

Thank you. We will now take our next question from Siddharth Paramuswaran from JP Morgan. Please ask your question. Siddharth, your line is open.

Hi there, everybody. Maybe if I can start my first question just on the China partnerships. I was keen to just... understand the or just match up the growth in revenues there with the growth in Renminbi AUM. If I look at the guidance or just the numbers that you've shown FY24 to FY25 it looks like there's about 15% growth in Renminbi but it looks like the revenues in the assets under management but looks like the revenues grew close to 30%. It does feel like there is either something one-off or there's some changes in fees or something's changed in terms of the amount that's being charged. Maybe you could just help us understand what's happening on that revenue line. It seems to have grown much quicker than the assets under management in the Channel Arts Pensions Company.

Yeah, thanks, Sid. I might get Adrian to give you some more detail on that because we've been obviously tracking it very closely.

The other thing said that was in there is in prior years, through the 2023 year, there was some product mix change that impacts some of the historicals because there was some policy changes. So that's now washed through the numbers.

Okay, so I mean, on a go forward basis, then, if we're just looking at this business, leaving your guidance aside, because it seems, I mean, as I understand this business, this is not a capital intensive business. This is not one where you'd normally guide on an ROI metric. If I just leave your guidance aside, and if I was just modeling this as a standalone business, should I be modeling revenues to grow at that sort of, you know, 12% type growth range? Like, how are you thinking about the business?

So as we said in the pillar two is a combination of voluntary and mandatory contributions. There would broadly speak as 12% contributions in that market. We've also communicated they're probably invested in lower fixed income products, so you would have a growth there for markets as well.

Right, so sorry, the 12% is the growth in FUM from contributions, is that right? Just so that I know what the 12% relates to.

Yes, we're saying a bit or two as a combination of both mandatory and voluntary contributions, broadly speaking across both 12%.

And that 12% is... 12% of FUM.

Yes, so the 12% contribution rate is underpinning that growth curve that we're seeing. and obviously Pillar 3 we regard as the next opportunity but unrealised at this stage so that potentially has more upside but we're very focused on Pillar 2 at the moment and so that growth curve you're seeing is the thing we're looking at in terms of AUM growth and obviously up 9% But sorry, just to clarify is the 12% on AUM or is it

on salaries, or what is that 12% number on?

Yeah, it would broadly be on salaries, but as I said, it's low investment returns in there, so it is broadly 12% contributions.

But AUM was up 9% for the half. So I think we're mandatory and voluntary contributions maxed at 12, but the AUM growth was 9% in the half. So just disconnect the two.

Yep, okay. So just to think about it going forward, so 9% and a half, we've seen historical growth rates at 12% on AUM. There's a 12% contribution rate. Just how should we think about the growth rate of that business going forward? Because obviously there's operating leverage as well, which you've been getting. So presumably earnings will grow quicker than that. But I'm just trying to make sure. There's a lot going on in those numbers. I'm just trying to make sure I understand the growth outlook for that business, which I don't believe it should be an... You should be guiding on an ROI metric, but maybe you can correct me on why it should be an ROI metric.

Well, just to be clear, it's not our job to guide on the growth curve of our partnership. I think that's for our partners in China to continue to deliver to. But I appreciate that it's a significant component. And so what we're reflecting here is what we're observing. AUM growth that we've seen already is reflective of those two factors. So as Adrian said, they're sort of that 12% contribution rate and a relatively low volatility. So we see relatively conservative investments. So we see that coming through in a pretty steady rate in terms of the CLPC contributions. As you note, yes, it is capital light. It doesn't issue capital demanding products, unlike some of the other pension companies in China. As to the cost of income position and the ongoing operating leverage, clearly you're seeing scale benefits. So there are some jaws there that we're plotting. And our approach is, though, from a partnerships point of view, has been to consistently guide on our view about what our returns are on that investment over time. And so that's why we've held with that approach. Now, as I mentioned before, we'll reconsider at the full year how we approach China as a reporting unit and the additional colour we can add to that.

Okay, thank you very much. Maybe just my final question, just on the bank, I want to just make sure understand the funding advantage from AMP Bank Go. So you've already scaled up at $1.7 billion of deposits, and this was supposed to be low-cost transactional funding. That's quite a big chunk of your deposit base already looking to scale it to $2 billion. Could you just help us understand how much deeper the funding is on AMP Bank Go versus the rest of your deposit funding? Sure.

So the $1.7 billion is the total of deposits at the half year. Not all of that is transaction accounts, of course. So there's a significant component, which is savings accounts. So that is reflecting some of that transition we're already seeing from existing bank to the new bank, along with new customer growth. So the mix issue in Go is critical for us. And clearly the aspiration is to continue to grow that mixed percentage in transaction accounts. The $1.7 billion is meaningful, but still not a significant component of our overall funding. And so it's got to both grow from an efficiency point of view, because it's more efficient to manage them and go than it is in the existing bank. And then the mix shift needs to continue to be in favor of those transaction accounts, which are really the high margin price. And so as we noted, there's more work to do in that space.

Just to add to that, we are at a transition point in terms of the funding mix where we have closed the legacy platform for new deposits and you're seeing that through GO. If you look at the NIM bridge in the appendix, you'll see a 12 basis point funding benefit which is the initial signs of that transformation of the funding mix coming through. Now that is partially offset by the capital relief and securitization trades we've done which has a net impact of nine basis points. So whilst it's at its infancy, I think the NIM bridge does highlight as we transform that funding mix between the legacy and growing go, you are seeing the early signs of that playing out through the NIM bridge. But that will obviously take time to scale but we're encouraged by the early signs.

Okay, thank you very much.

Thank you. And we'll take our next question from Lovetani Sotiru from MST Financial. Please ask your question, Lovetani. Your line is open.

Thank you. Just a quick follow-up. I know there's a lot of questions so far on CLPC. And just to follow up on what Sid was digging into on the margin, because it is a noticeable step up that came through. Have there been something akin to, you know, if you look at the Australian market where you have My Super Choice and all these different modules you can step up in, did something like that happen in the last year, year and a half in the business that has seen the material margin shift? And can you talk to whether Pillar 2 and Pillar 3, and I know Pillar 3 is only small at the moment, but whether there's a much difference in the margin, revenue margin in that bucket?

Yeah, thanks. Thanks, Liam. No, look, the short answer is no. There's not any specific one-off margin variance that we are seeing in terms of the reported results. There is mixed issues inside the portfolio, obviously, but broadly, it's just ongoing growth within the business. As I said, there was In the 23 year, there was a more significant mixed change because it was a regulatory change back in 23. And if you recall some of our earlier reporting a number of years ago, we talked to that in terms of some of the flow and impact, but that's washed through. So what you're seeing now is predominantly that pillar two growth. There's not significant margin difference that I'm aware of between Pillar 2 and Pillar 3. Pillar 3 is obviously very small, though. It's a little more attractive a margin, but that doesn't have a meaningful impact in terms of earnings yet because it's obviously such small volume, obviously a large addressable market, but to be an opportunity...

One of the things you've talked to in the past in relation to CLPC is your share of net flows. What does that look like? You're openly talking about it being the preeminent player in that pension space. Is it holding market share? Is it gaining? What does the market position look like?

I don't think we've ever gone through a detail of market position. But certainly, my perspective, I think I've used that term a number of times, preeminent. I think a couple of reasons for that. One, they've got a very dominant brand position. They do have a very strong position in terms of pillar two, which is around about 30% market share. So if you do the math, there's I think 12 pension businesses, so they account for 30%. So that's significant. In Pillar 3, equally, they're a very significant participant because they've been participating in the pilot across all regions. As that scales, we would expect the strength of the China Life brand to be significant in that because it's a much more D2C-style business, much more retail-oriented as opposed to corporate. But in that Pillar 2 space, that 30% share is where I've drawn my characterization of preeminence.

Yeah, got it. Can I move on to the capital stack? Of the $300 million excess capital, you flagged the DTA on balance sheet. I think you still have some DTAs sitting off balance sheet, if you could just update on that. But can you give us an idea, are the one-off costs largely done? Are they rolling off? And we've had a lot of these non-core assets for sale like PCCP, for a while now. What would be the holdup around selling that asset?

Yeah, thanks Lev.

Maybe if I just talk to DTAs, yes, good utilization obviously in the half. There are some DTAs off balance sheet still to be recognized. The broad picture on that is about $200 million, although they have some varying nature. in terms of their ability to be utilized. But certainly there is some additional off balance sheet yet to be recognized. In terms of the non-strategic assets, as I said, we obviously want to realize those as market conditions allow. PCCP, as we've talked about quite openly, is one of those, but so too is the range of residual carry and other matters so you know we continue to pursue all those opportunities and you know we certainly update as soon as something emerges there it remains our clear focus to to realize that over time.

Just the one-off costs and that's it.

Yeah sorry one-off costs apologies um yeah the below the line is obviously continuing to to trend down which is pleasing uh you would have seen the you know about half or a little more of the tail of that simplification spend through so there's a small amount of that left in the second half but you're seeing generally much fewer items below the line which is consistent with our approach where we want to have this operating business not a significant one-off so I think the fall in litigation obviously reflects continuing to resolve legacy matters and generally that sort of forward momentum in the business, which is important. Thanks.

Thank you. We will now take our next question from the line of Freya Kong from Bank of America. Please ask your question, Freya. Your line is open.

Hi, good morning and thanks for taking our questions. Can I just follow up on the product mix comments you made for CLPC? washing through. Because revenues, back to Sid's question, which was basically revenues grow a lot faster than AUM and FY25. Was there some of that coming through in first half 26 as well? And going forward, you'd expect revenue growth to track closer to AUM growth?

Yes, so we expect FY to grow at normal. As I said, the product mix is probably lined up now. Blair mentioned there was a regulatory change in prior years, prior periods.

Okay, great. And then just on the operating leverage for CLPC, which continues to come through quite nicely, 45% CTI is already quite strong. Do you expect that to continue and more scale benefits to flow through?

I mean, obviously, that'll depend on operating conditions in China and CLPCs. but certainly we're encouraged by those draws. We'll continue to report that. I think that clearly the addressable scale growth continues to look positive from our point of view as a 19.9% shareholder.

Okay, great. And just on the payout ratio from China partnerships, it's stepped up to 40 to 41%. Is there any scope for this to increase and what conversations have you had? or are there any companies in the market we can look to as comps for a decent power ratio?

Yeah, there aren't many comparables in the market, so I appreciate that that's rather unique. Obviously, as we have said consistently, we continue to talk to our China partners about capital efficiency within the business. And as we said, it is a relatively capital light business, albeit it's growing strongly. So that lift in power ratio for CLPC from 35 to 41 was very pleasing and we'll continue to have those conversations with our partners in China but equally accept and respect the fact that they are scaling and growing that business tremendously and so we would want to first and foremost see that as the principal activity and I think they're doing a fantastic job of it.

Okay, great. And sorry, one final question on the bank NIM. If there's further capital optimization in the second half of the year, would that put downward pressure on the NIM guidance that you've given? Just how do I think about the two?

I'll take that one, Blair. I think that the NIM guidance we've given you, which is broadly flat to where it is now at around 1.25%, incorporates The net impact on the benefits we're seeing on the funding mix side and securitization. So I would say that is incorporated into that guidance.

Okay, so we're assuming flat versus first half, which means no further securitizations assumed in second half, or is that the wrong way to think about it?

No, that's not what I'm saying. I'm saying that we expect to continue to see benefits as we scale AMP Bank Go, which provides us a positive impact in terms of the NIM. What I'm saying is we expect that we will continue to look at capital optimization of the bank, which is a net offset to what we're seeing in terms of the funding benefits, which is why we're guiding to a flat NIM, but we anticipate continue to kind of optimize, you know, find the efficiency frontier there as we think about capital efficiency within the bank. So it's incorporated in our guidance.

Okay, thank you. Thank you. We will now take our next question from Nigel Peterway from Citi. Please go ahead, Nigel. Your line is open.

Good morning, Blair, Jackie, Adrian. Just first of all, maybe a follow-up question on the bank. I was just wondering, what's the ceiling of securitization funding in the bank you'd be comfortable to carry and how quickly might you expect to get there?

Thanks, Nigel. Look, we haven't got a predetermined number on that. As Jackie said, there's kind of an efficiency frontier there that we're looking at in terms of the mix of funding that we attract through GO, the ramp down of this heritage bank. and then the opportunities that we see in the market across not just securitization and warehousing but the range of capital relief measures and as you're seeing there's more activity in that space. So there's clearly very significant demand for that and a trend in that direction and so we're looking to take advantage of that as appropriate and considering the wider mix.

Okay. All right. Maybe moving on then. I mean, one of the things that doesn't seem to have gotten much attention yet, unless I missed it, was the variable cost performance in the platform business, which seems to have at least been one of the key generators of the profit increase. So maybe you can sort of expand on what's been going on there and secondly, whether the scopes are sort of reductions moving forward.

Yeah I mean there are obviously we continue to see operating leverage across platforms and there's some mixed issues between variable and controllable as we start to in the source some activities that have sometimes been outsourced through variable costs and so there is it's a mixed cross variable controllable costs but broadly speaking we can as we continue to develop and capability and functionality that gives us more opportunity. I sort of look at platforms as sort of a total cost variable and controllable combined. And, you know, as Jackie mentioned, driving that jaws between a growth in revenue and controlling those costs, both variable and controllable, frankly, is critical.

Thanks. And then sort of if you just sort of focus on the revenue margin in platforms, I mean, obviously a couple of sort of explanations you give in the side there do actually seem negative in terms of sort of fee cliffs and probably mix as well. Clearly, you've had a couple of months of a cash change. Is there anything else that's going on? I mean, stable margins against those two negatives seemed quite a good outcome. It's just maybe if there's anything else in there.

Yeah, so obviously... Yeah, no, agree, Nigel. And so as we flagged previously, and as is now evident in the market in terms of public disclosures, we made some quite significant changes to the way we manage or we deliver cash solutions into the platform. Thank you very much. within those managed portfolios while they grow strongly, looking always at how our manufactured solutions and product can form part of those portfolios is an important component. That's obviously a whole lot easier to contemplate given the tremendous investment returns that Anna Shelley and the team have delivered that obviously benefit our ANP supermembers but also form part of that broader investment offering as we manufacture in that space.

Okay, thank you for that. And maybe just finally, I mean, you mentioned that you're still sort of looking at maybe doing something with PCCP when the opportunity arises. Was there any recovery in return from that business this off or is it still pretty subdued?

So two things. There was some downward valuation impacts in terms of the individual funds that we hold. That was the offset that Jackie mentioned. Broadly, the business itself, though, carries on very well. It's a very well run business. and so yeah and obviously a strong payout and so the management entity which we have our stake in 21 something percent is very strong and we'll continue to work with you know the founders particularly on those realization opportunities for our stake.

Okay thanks very much.

Thank you. Our next question comes from the line of Andrew Buncombe from Macquarie. Please ask your question. Andrew, your line is open.

Hi, Tame. Thanks for the opportunity to ask questions and congratulations on the result. Just the first one from May. Just interested in how the board are thinking about doing an additional buyback given that the stock is trading so much above NTA. Do they have any hard and fast rules or philosophies about where they'd be happy to go to. Thanks.

Yeah, thanks, Andrew. Yeah, obviously it was a significant point of conversation at the board, and we have walked through management and board a range of sensitivities in terms of the value of that. Clearly, our announced buyback, I guess, reveals our approach, which is the price and positive impact in terms of that approach. And I think it's aligned with our approach in terms of the committed position with shareholders. The additional point to that, Andrew, being clearly given our low franking credits, we're very sensitive to dividends, although we obviously have boosted that because we also respect that we've got a very wide retail shareholder base. So we're looking to balance all those things. But yeah, we'll continue to watch that very carefully.

Understood. And then the only other one from me was just in relation to controllable costs as we go into FY27. I suppose in terms of thinking about the bridge, should we expect the further investment in the bank to continue into FY27 or does that fall away and then essentially help the controllable cost growth into 27? Thanks.

Yeah, thanks. No, we are seeing more of a BAU style approach as we head into 27 as it relates to the bank. and so you know that that pendulum swing we described in terms of the accelerating the transition and therefore looking to you know harvest those efficiency opportunities and the existing bank is critical to that and so we want to you know work really hard on that through the second half and that gives us confidence as we look in the 27 and then as I mentioned in the presentation clearly managing you know AI opportunities and can contain the cost and harvesting some of those efficiencies is one of the key pieces of work we're going to do in the second half and to be able to give us more confidence and give you some further clarity as we look at the 27.

That's it for me. Thank you.

Thank you. We will now take our next question from the line of Andre's Technique from RBC. Please ask your question, Andre. Your line is open.

Good morning. Andre here from Royal Bank of Canada. Can I ask two questions, please? Can I ask my first question just around your distribution and marketing initiatives in platforms and in super investments. Like how progressed are you with some of these initiatives? Because I think you might have been making some recent hires. So yeah, how progressed are you with your distribution and marketing initiatives there?

Yeah, thanks, Andre. Frankly, pretty excited about those initiatives. In the first 90 days in the role, I've spent a substantial amount of time out on the field with Christine Goodwin who leads our sales teams across North and with Edwina. I think I've seen more than 100 advisors through that period. Great work in the field from our teams and continuing to grow and recruit and the momentum we've got in North and the offer that we have to go to market further assists our recruitment of really high caliber candidates. We've got some more hires but there's a corresponding one this morning who's joining that team. So as we're looking at the second half we continue to further strengthen that. We just made a key hire in our super investments business, Richard Millington, who will join us actually in a couple of weeks. He's coming into a super investments business where there's a very significant pipeline of opportunities. I've been personally involved in a number of those pitches because we're absolutely focused on sales and growth. And that includes myself, Edwina, Melinda, the whole team. So, yeah, we're both seeing positive response, but also resourcing against that.

Thank you. Look, my second question around costs, particularly controllable costs and super investments. So it looks like the controllable cost of super investments, you know, they're annualized in about 180, 185, which is very similar to platforms. And yet the AUM is about a third lower in super investments. And, you know, we get the impression on the outside it should be more of a cookie cutter style business, so maybe easier to run. So is there substantial cost opportunity in terms of super investments?

Yeah, great spot. Yes, that's an area where we see further potential in terms of cost save and operating leverage. That tail of our simplification spend, which you saw expense in the first half, is reflective of the final stage of our simplification program, which is what we call super modernization. We've got a brand new portal in market, the app I'm literally testing right now. The team that let me test, they love my feedback. And we will roll that imminently. That combines a whole bunch of straight through processes in the back end of that. That is part of where we see the opportunity, both in terms of customer experience, but also operating leverage for us as we look into FY27.

Thanks so much.

Thank you. Next, we have follow-up questions from the line of Siddharth Paramuswaran from JP Morgan. Please go ahead, Siddharth.

Sorry, just two quick follow-ups. One is just on the bank. I'm actually struggling to understand what's happening there on the securitization side. It seems like from your answers to my previous question, There seems to be a drag on your NIM of nine basis points from your securitization efforts, and from what I can tell, you've released about $80 million of capital. It seems like a very poor return, and you're planning to do more of this. I'm just wondering, am I interpreting this correctly, and why are you doing more of it? It seems like the NIM would have been nine basis points higher if you hadn't done it, and we wouldn't have... and many others.

So I guess if you refer to slide 39, what we've tried to do there is really break out the NIM walk for the bank. When you think about your question, there's a couple of things playing into that. As Jackie touched on, we're seeing growth in the GO business, improvement in deposit margins through GO, and that's fed into that 12 basis point improvement. Equally, within that 12 basis point pickup, you're also seeing the closure of our legacy deposit franchise, as well as our lessening reliance on retail deposits. and so when you think about those three factors being I'm actually raising less retail deposits, I'm raising more go deposits and I'm also utilising securitisation as a capital and funding tool, it's really the net impact of all of those which gives you the three basis point improvement. To sort of break it in isolation and say securitisation is resulting in a nine basis point decrease in MIM doesn't paint the whole picture because what it's enabling you to do is lessen your reliance on total retail deposits and give that ability to grow. So it's a net of everything. You can't sort of strip them individually.

Okay. I'm not sure I fully understand, but I'll leave it. Okay. Maybe just my second question is just around, it goes back to my original question, just on the CLPC issue. The first half 26 earnings growth on first half 25 for the combined partnerships in China was over 100%. And you indicated there was definitely something going on on the revenue margin side because of the mix in FY25 versus 24. But you said that there was some stability after that. but the earnings growth seems to be much stronger in first half 26 versus first half 25 and I was just hoping you could help us understand well do you get a similar breakdown of you know revenues and expenses for first half 26 so that you just help us understand to make sure it's clear to us whether you know first half 26 is the go forward because it just seems like there's a step up again so I'm just trying to make sure I understand the

I'm not able to map all of you.

Yeah, I'll get Adrian to just give you a go. But for clarity, obviously, there is some timing differences in terms of the way all our results come through from China. So there is a lag affected, but we're obviously trying to surface more of that reporting given the significance. But Adrian, do you want to make a comment on the first half?

Yes, we've seen the financials from China. I think the point to note is when you look at what we presented in the skills marketing field for, if you look at revenue over EOM and the details provided, that's a good indicator of the growth. And it's also a good indicator of the mixed change required to as well. So if I refer you to slide page 30, that was kind of a good view of the momentum and the mixed changes businesses experiencing, particularly when you look at revenue over average EOM.

Okay, thank you.

Thank you. Our next follow-up question comes from the line of Freya Khan from Bank of America. Please go ahead Freya, your line is open.

Hi, thanks for taking the follow-ups. Just on our platform flow, some of your peers called out a quieter June because of budget uncertainty. Did you see anything similar in the period that could have depressed your June performance?

Yeah, thanks. No, frankly, we didn't, to the same extent that I've seen others comment. And I think part of that is because we obviously have a significant weighting towards retirement and superannuation, 80% of the We look to be more positively experienced in terms of the outcomes from the budget. So we are seeing continuation. If you think about the client base we're serving in North, and we're being quite clear about this, the clear target is Mass Afro-Australian saving for retirement and taking quality financial advice to do that. They are continuing to save. The setting's set for that, and there's broadly a positive direction towards saving in super.

Great thanks and just on the EBIT margin for platform which has continued to improve with scalability, some of your peers are also operating I guess closer to 50%. Do you think this is achievable for North in the medium term?

Well I mean obviously the improvement we're seeing is pleasing and that's the right trajectory. We certainly expect that a number of the initiatives we have in train already will continue to give us additional improvement in operating leverage, not just volume growth, but obviously some components we're building that we think will change some of our cost mix. And so the goal is to continue to expand that even margin.

Okay, thanks. And then just on the AI implement launch in North, when is this happening and where are the costs captured? Is it variable, controllable, and is it within guidance already?

Yeah, thanks. AI implementers and the AI workbench is already out there in terms of North Interactive. AI implementers in pilot already. Certainly speaking to a couple of advisors in the last few weeks when I was out and about, they're pretty excited about that. It gives them a very substantial efficiency leverage. That is engineered right into the heart of North. And so part of the approach there was to very carefully manage you know the way that that emerges in terms of costs that'll all be within our controllable costs for North.

And is there any revenue upside from this?

Yeah well they I mean we're not there's no we're not charging for that so our approach to the way we deploy functionally for North is you know that's that's the platform deliverable we're not sort of adding on things the the upside for us is obviously the The more efficiency we could create for advisors, quite frankly, the more time they can spend with clients and new clients. And there is clearly a backlog of clients wanting to see advisors to get more advice. So our ambition is deliver more functionality, including through AI, but a whole range of other changes as well, to create more capacity for advisors to substantially grow the number of clients they see. And then our belief is we get to participate in some of that benefit.

Thanks. That makes sense.

I am showing no further questions. Thank you all very much for your questions. I'll now turn the conference back to Blair for closing comments.

Thanks everyone for attending. Appreciate we've gone a little over a lot of time. I appreciate sort of as always there's quite a lot in that result to absorb. I know we've got follow-ups with a number of you over the coming days so look forward to sharing more of that. Enjoy the rest of your day.

For your participation in today's conference, this does conclude the program. You may now disconnect your lines.