Full Year 2026 MyState Ltd Earnings Call Transcript
Key Points
- Underlying NPAT increased 41% to $58.3 million, with underlying EPS up approximately 12%.
- Delivered $11.8 million in run rate synergies, on track to achieve the FY 2028 target of $20-25 million.
- Net interest margin improved by 3 basis points to 1.5%, with second-half NIM up 8 basis points.
- Selfco, the equipment finance business, grew its loan book by 134% and contributed $3.9 million to NPAT.
- TPT Wealth's operating income increased 11% to $16.4 million, with trustee services FUA up 18%.
- Home loan portfolio grew 5.8% to $13.6 billion, with second-half annualized growth of approximately 11%.
- Credit quality remains strong, with 90-day arrears at 32 basis points, down 12 basis points year-on-year.
- Full year dividend increased to $0.245 per share, up $0.03 from FY 2025.
- Cost-to-income ratio improved by 156 basis points, with pro forma expense growth of only 0.8%.
- Underlying return on equity improved 80 basis points to 9.7%.
- Statutory NPAT of $56.2 million was impacted by $2.1 million in merger-related integration costs and fair value adjustments.
- Total integration costs are now expected to be $32 million, up from previous estimates due to the new core banking platform and higher inflation.
- Retail banking competition remains robust, putting pressure on net interest margin in the retail segment.
- Home loan application volumes in June and July were down approximately 7% following federal government budget announcements.
- The group's capital ratio was managed down to 15.8% following Tier 2 capital redemptions of $52 million.
- Selfco's growth was deliberately slowed in certain sectors, such as transport and logistics, due to geopolitical challenges.
- The new core banking platform will not be operational until before the end of FY 2028, with benefits not included in current synergy targets.
- The full year dividend payout ratio of 71.5% is close to the midpoint of the target range, limiting potential for higher payouts.
- Deposit growth of 4% lagged loan growth of 7%, potentially increasing reliance on wholesale funding.
- The rebranding of the Auswide business to MyState is not expected to be completed for approximately 12 months.
Thank you for standing by and welcome to the MyState Limited fiscal year '26 results conference call. (Operator Instructions)
I would now like to hand the conference call over to Mr. Brett Morgan, Chief Executive Officer. Please go ahead.
Thanks, Jamie, and good morning, everyone, and thanks for joining us for our full year 2026 results briefing. I am Brett Morgan, MyState's Managing Director and CEO, and with me is Gary Dickson, our CFO. Today, we launched our FY 2026 financial results with the ASX, and these are also available on our website. I will begin with an overview of the annual results and the key execution highlights before Gary takes you through the financials in more detail. I will then return to summarize our priorities before we open the call for questions. Moving to slide 4. FY 2026 was an important year for MyState. It was our first full year operating as a merged group, and I am pleased to report that the merger thesis is translating into
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