AMP Limited (AMP) Earnings Call Transcript

Good day, and thank you for standing by. Welcome to AMP Half Year 2026 Results Conference Call. [Operator Instructions] 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's 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 FY '26 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. NPAT 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 NPAT contribution when compared to the first half 2025. Notably, CLPC also lifted its dividend payout again in compared to FY '25, 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 announced 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. Platforms 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 nonstrategic partnerships and minority interests as market opportunities present. The 3 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 shift to retirement incomes and wealth transfer is a significant latent opportunity. In New Zealand, there is now a growing acknowledgment 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 long-standing 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 3 opportunity, which is in its infancy with an addressable market of over 0.5 billion citizens, again, represents an ongoing positive growth opportunity in this market. Our 2026 priorities are set against a simple and clear focus on 3 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 in 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 quartile returns for members, cementing our superior returns relative to most funds across 1, 3, 5 and 7 years. Our North road shows in the first half showcased the new North Interactive Wealth Portal to more than 500 advisers and revealed the powerful AI workbench we are deploying to unlock adviser efficiency and productivity, already saving up to 2 hours per client review. That translates directly into advisers 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 NPAT and also reduced below-the-line items, boosting statutory NPAT significantly compared to 1H '25. 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 are 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 advisers operating in the Australian marketplace to drive efficiency that will make a difference for them and their practices. We're already seeing benefits from 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 are also expanding our defensive posture, especially in cyber defense, tech FinOps 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 confidently 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 government 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 nonstrategic 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 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 costs 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 $0.03 per share, 20% franked, which is up from previous guidance of $0.02 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 results 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 NPAT. We will continue to realize capital from nonstrategic 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 & Investments recorded its first positive net cash flow since half since 2017. New Zealand contributed -- 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 demonstrates the continued momentum in the business. Revenue grew faster than costs in the half, with revenue up 6%, controllable costs up 2.5% -- 2% 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 Adviser Study, North was rated the #1 platform across a number of categories, including adviser proposition, retirement, reporting, price competitiveness. We were joint first in digital experience and rated #2 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 advisers to North with FUA greater than $1 million and signed 38 new AFSL agreements. MyNorth 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 FY '25 to 42% this half. Closing AUM reached $92.7 billion with a diversified mix and continued strong growth in managed portfolios. Super & 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 remained 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 mix 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 pretax carried interest from DigitalBridge, which we announced last month. This was 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. Nonstrategic 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-light 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 value. 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 RMB 2.6 trillion. Over the past 2 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 RMB 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 business this 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 FY '26 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 are 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 FY '26 pro forma capital returns to $425 million. The Board will review the final dividend at FY '26. 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 precis 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 advisers 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've seen 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. That wraps up our summary of the first half results. We'll now open it to Q&A.

[Operator Instructions] First question comes from the line of Simon Fitzgerald from Jefferies.

I've got 2. I might direct those to Jackie, if I could, please. Just firstly, on the China partnerships. Obviously, experiencing a really decent shift in momentum there and now a meaningful component of group earnings. First half '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? Or was 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?

Yes. Day 14 for Jackie. 14 days to observe that detail. But no, I mean, as Jackie said in the presentation, that growth is really operating leverage. The cost-to-income fall in the last 2 years of 55% to 45% reflects that leverage, and you can see the AUM growth. That AUM growth is particularly driven out of Pillar 2, as we've said consistently for some time. And 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.

Good fit. And then just on the bank with the securitization program, I think that I can see it was $2.3 billion of securitization activity. I think that's a $1.4 billion net increase from FY '25 to first half '26. But just how should we think about that in terms of the level of capital release? I've generally sort of thought about this in the past to say $1 billion of securitization equates to around about $30 million to $50 million of freed-up capital. Is that the right way to think about it? And then maybe you can sort of touch on 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?

Yes. 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 release. 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 $1 billion of securitization activity equating to between $30 million and $40 million as that drop. So yes, that's in the right ballpark. It's probably $30 million to $40 million.

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 you're seeing in terms of from external customers versus your existing customer base?

Yes. Maybe I'll pick that up. Obviously, really pleased with the momentum across both Platforms and S&I. In Platforms, we continue to see broad-based support, both from advisers who are part of the Akumin 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 advisers. So if you go back to that Platforms slide, I think we had 74 new advisers with more than $1 million AUM in the half. I think that's sort of a 3x increase from the first half '25. So that momentum keeps building. So that's encouraging. In S&I, clearly, 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 in a number of pitches recently. We've got a number of new mandates in the pipeline. And that's obviously quite a turnaround from where we've been. So that's very encouraging. And particularly the things that are resonating with employers is obviously our Lifetime solutions, our Super Boost solution as well as our digital advice, which is a full-scale digital advice. So that's really important for members in those schemes.

We will now take our next question from the line of Julian Braganza from Goldman Sachs.

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. Just want to understand how you're thinking about this over the medium-term, just from a growth angle.

Yes. We've obviously -- we haven't really rebased the way we're expressing that. I think we've always typically expressed 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 FY '26, our starting point guidance of 10% return through the year actually we'd attribute 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.

So -- but if I assume 12% to 15% ROI and I assume a growing carrying value, like 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 how 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 partnership. I might get Adrian just to fill in the details here.

Julian, when you look at the valuation and the modeling, just be conscious of dividends, commodity investments as well. So as we grow the equity in those JVs, we offset the dividends as they come out hence 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 GO, 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?

Yes. Yes. Thanks for the question. Look, as Jackie just mentioned, for every $1 billion that we securitize or get capital relief on, that's sort of in the range of $30 million 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 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. I know you benefited there from high -- I think you said from higher group cash as well as higher interest rates. Correct me if I'm wrong. But I just want to understand the sustainability of that $25 million from here.

Yes. Perfectly valid question. Look, it did benefit -- you're right, it did benefit from both dimensions. 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 we made now in terms of buyback and dividend contribute to that, but so too does some of our contemplation of future deployment of that cash. So one example will be we've obviously got -- 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 sorry, just the last question from me. In terms of dividend, is your guidance still for $0.02 per share over 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. So what's your guidance for out-of-year dividends at the moment?

Yes. 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 present point in time, the Board is going to review the final dividend as we look at FY '26. So essentially, that new position essentially replaces that prior guidance with our $0.03 interim dividend being the starting point.

We will now take our next question from Siddharth Parameswaran from JPMorgan.

Just 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 you've -- or just the numbers that you've shown FY '24 to FY '25, it looks like there's about 15% growth in renminbi, but the -- it looks like the revenues -- sorry, in the assets under management, but it 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 has changed in terms of the amount that's being charged. Maybe if 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 China Life Pension Company.

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

Sid, just what we do on this call is probably mixes that sit underneath that. There is different margins, different products that sit underneath. But you're correct, there is a growth in there. That's a natural shift of our margin.

The other thing, Sid, 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 were some policy changes. So that's now washed through the numbers.

Okay. 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 normally guide on an ROI metric. If I just leave your guidance aside and if I was just modeling this as a stand-alone business, should I be modeling revenues to grow at that sort of 12% type growth range? Like how are you thinking about the business?

Sid, as we said in the Pillar 2, it's a combination of voluntary and mandatory contributions there. But broadly speaking, it's 12% contributions in that market. We've also communicated that they're probably invested in lower fixed income products, so you would have a broad different market as well.

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

Yes. We're saying Pillar 2 is a combination of both mandatory and voluntary contributions, broadly speaking across both 12%.

And that 12% is...

The 12% of sum.

Yes. So the 12% contribution rate is underpinning that growth curve that we're seeing. So -- and obviously, Pillar 3, we regard as the next opportunity, but unrealized 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?

Yes, 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 have mandatory and voluntary contributions back to 12%, but the AUM growth was 9% in the half. So just disconnect the 2.

Yes. Okay. So if I -- so just to think about it going forward, so 9% in the 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 these numbers. I'm just trying to make sure I understand the growth outlook for that business, which I don't believe it should be -- 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, we are obviously -- 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. We -- but I appreciate that it's a significant component. And so what we're reflecting here is what we're observing. That 9% AUM growth that we've seen already is reflective of those 2 factors. So as Adrian said, the sort of that 12% contribution rate and a relatively low volatility. So we see relatively conservative investment. 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-to-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're 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 color we can add to that.

Okay. Maybe just my final question. Just on the bank. Just I want to just make sure I understand the funding advantage from AMP Bank GO. So you've already scaled up $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 cheaper 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 of 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 mix 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. So 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 release and securitization trades we've done, which has a net impact of 9 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.

And we'll take our next question from Lafitani Sotiriou from MST Financial.

Just a quick follow-up. I know there's a lot of questions so far on CLPC. And just a follow up on what Sid was digging into on the margin because it is a noticeable step-up that came through. Has there been something you came through, if you look at the Australian market where you have MySuper Choice and all these different modules you can step up in, did something like that happened in the last year, 1.5 years 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?

Yes. Thanks, Laf. 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 mix 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 mix change because there 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 2 growth. There's not significant margin difference that I'm aware of it between Pillar 2 and Pillar 3. Pillar 3 is obviously very small though. It's a little more attractive on margin, but that doesn't have a meaningful impact in terms of earnings yet because it's obviously such a small volume, obviously, a large addressable market to be...

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

I don't think we've ever gone through a sort of 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 2, which is around about 30% market share. So if you -- I mean, do the math is, I think, 12 pension businesses, so they account for 30%. So that's significant. In Pillar 3, equally, they are 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 because it's a much more D2C style business, more 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 preeminent.

Got it. Can I move on to the capital stack? And of the $300 million excess capital, you've 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 on the one-off -- are the one-off costs largely done? Are they rolling off? And we've had a lot of these noncore assets to sell like PCCP for a while now. What would be the holdup around selling that asset?

Yes. Thanks, Laf. 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 nonstrategic 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 we continue to pursue all those opportunities. And we'll certainly update as soon as something emerges there. It remains our clear focus to realize that over time.