Highlights

  • Helia Group (ASX:HLI) reported underlying NPAT of $106.3 million for 1H26 despite a lower premium base following customer changes.
  • The company announced a combined 43 cents per share Dividend and a new $75 million on-market buyback.
  • A four-year ING Bank Australia LMI agreement improved Revenue visibility following the loss of Commonwealth Bank business.
  • Strong Capital levels and favourable claims experience continue supporting Shareholder returns.

Helia Group (ASX:HLI) delivered its 1H26 results on 11 August 2026, highlighting the company’s ability to maintain profitability and return capital despite a significant shift in its customer base.

The lenders Mortgage insurer has been navigating the loss of Commonwealth Bank as a major customer while rebuilding its portfolio around renewed banking relationships. The agreement with ING Bank Australia, combined with strong capital levels and favourable claims conditions, has helped provide greater stability to the Business outlook.

However, the company continues to face longer-term questions around premium growth, customer concentration and the sustainability of future distributions as the existing insurance book gradually runs off.

1H26 Results

For the six months ended 30 June 2026, Helia reported underlying net profit after tax of $106.3 million, compared with $126.1 million in the prior corresponding period.

Statutory NPAT declined to $100.0 million from $133.7 million, reflecting changes in Earnings conditions and business activity following customer portfolio changes.

Insurance revenue decreased 6% to $170.6 million, reflecting lower new business volumes. The decline followed the loss of Commonwealth Bank, which had historically represented a significant portion of Helia’s gross written premium.

Despite lower revenue, the company maintained strong profitability due to favourable claims performance. Net incurred claims were negative $14 million during the period, resulting in a negative claims ratio as low mortgage arrears and favourable portfolio conditions supported reserve releases.

Annualised underlying Return on Equity remained strong at 22.2%.

Capital Returns

Capital management remained a key focus of the result. Helia declared a fully franked interim ordinary dividend of 16.0 cents per share and an unfranked Special Dividend of 27.0 cents per share.

Together, the payments total 43.0 cents per share and are scheduled to be paid on 4 September 2026.

The company also announced a new on-market share buyback of up to $75 million, continuing its approach of returning excess capital to shareholders.

Helia’s regulatory capital position remained supportive, with the PCA coverage ratio at 2.07 times, above its target range of 1.4 to 1.6 times.

The company also reported net tangible assets and contractual service Margin of $4.94 per share, reflecting embedded value from existing insurance contracts.

Business Drivers

Helia’s business model continues to benefit from the long-duration nature of lenders mortgage insurance. Premiums written in previous periods continue contributing to earnings over time, providing a source of profitability even as new business levels change.

The company’s recent earnings performance has also benefited from favourable housing and employment conditions, which have supported low mortgage arrears and reduced claims activity.

However, rebuilding new premium growth remains a key challenge. The loss of Commonwealth Bank has reduced future premium opportunities, while changes in government housing support programs may influence Demand for lenders mortgage insurance among first-home buyers.

The renewed four-year agreement with ING Bank Australia, commencing from 1 July 2026, provides greater certainty around future business volumes. Helia also continues maintaining relationships with other banking partners, including Amp Bank.

Customer Position

The ING agreement represents an important development for Helia following a period of uncertainty around customer concentration.

The company’s relationship with ING provides improved visibility over future premium flows and supports efforts to maintain market position.

Helia continues focusing on expanding and retaining lender partnerships while managing the transition towards a smaller but more concentrated customer base.

Investor Focus

Key areas investors will monitor include:

  • Delivery of FY26 insurance revenue guidance of $330 million to $360 million.
  • Progress of the $75 million share buyback and future capital management decisions.
  • Claims experience and whether current favourable conditions remain sustainable.
  • Further customer wins or contract renewals to support premium growth.
  • The impact of housing policies and market changes on future LMI demand.

Risks

Customer concentration remains the most significant challenge for Helia. The loss of a major banking relationship demonstrated the impact that changes in lender partnerships can have on premium volumes.

The company also remains exposed to housing market conditions, employment trends and borrower financial stress. While recent claims experience has been favourable, a deterioration in economic conditions could increase future claims costs.

Government initiatives that allow some borrowers to access housing without lenders mortgage insurance may also reduce the long-term addressable market.

Maintaining sufficient new business growth will remain important as the existing insurance portfolio continues to mature.

Outlook

Helia enters the second half of FY26 with a strong capital position, improved customer visibility through the ING agreement and continued capacity to return capital to shareholders.

The company’s near-term outlook remains supported by favourable claims conditions and embedded value within its existing insurance portfolio. However, the longer-term challenge will be rebuilding premium volumes following major customer changes.

For investors following ASX financial stocks, Helia’s Investment case remains centred on the balance between current capital returns and the ability to create sustainable future earnings growth.