NPAT rebuilt to NZ$48.8m as the NZ lending reset rolls off

Both growth rates are classified as unprecedented in Annolyse's historical baseline (4-period means of -25.7% and -24.6% respectively), but the scale primarily reflects recovery from a HY25 comparable depressed by the NZ lending portfolio reset and one-off regulatory assurance costs. Management's underlying NPAT moved from NZ$10.7m to NZ$46.1m, which is the cleaner step.

Net operating income rose 11.1% to NZ$172.3m, above the historical baseline (mean 6.7%, range -2.0% to 10.2%), supported by NIM expansion. ROE rebuilt to 7.8% from 0.6%, back inside the historical normal range (mean 8.1%, range 6.1% to 10.8%). Total assets reached NZ$8.8b and equity NZ$1.3b. The interim dividend was lifted 75% to 3.5 cents.

• Reported NPAT growth of n/m on a NZ$3.6m comparable overstates the operating step-up. The underlying-to-underlying move (NZ$10.7m to NZ$46.1m) and the recovery of ROE from 0.6% to 7.8% within the historical normal range are the figures that describe actual earnings power. Investors should anchor to the underlying read.
• NIM-driven NOI growth is the genuine operating signal. The 11.1% lift in net operating income sits above the historical baseline of 6.7% and is attributable to margin expansion, improved asset quality and Reverse Mortgage volume per the release. This matters because it indicates the recovery is not purely a non-repeat of one-offs but includes underlying revenue improvement.
• AU banking is gaining share within an improving mix. AU banking revenue rose to NZ$53.0m (30.8% of group, +1.7pp) with segment result up to NZ$16.7m from NZ$12.4m, while NZ banking result rebuilt from NZ$0.9m to NZ$31.0m. The mix shift means group earnings are increasingly exposed to AU Reverse Mortgage economics rather than the NZ lending book that drove the HY25 reset.

The shape context is unusual: HY25 contributed only 9.3% of FY25 NPAT (NZ$3.6m of NZ$38.8m), reflecting the first-half reset rather than a structural seasonality. With HY26 underlying NPAT of NZ$46.1m almost matching FY25 underlying NPAT of NZ$46.9m in a single half, the implicit FY26 trajectory looks materially ahead of FY25 underlying if the second half holds.

The release does not disclose a numeric FY26 NPAT or NOI target, so this briefing cannot mark the result against a stated dollar number; the read is anchored to the company's own ≥7% underlying ROE guide and FY25 baseline.

That is the opposite of the usual underlying-vs-reported pattern and warrants emphasis on the underlying figure when comparing to FY26 guidance.

Operating cash flow of NZ$299.5m and pre-lease free cash flow of NZ$297.2m both sit above the historical baseline (3-period mean NZ$26.0m, range -NZ$150.9m to NZ$254.4m), but for a bank these figures move with deposit and loan book flows rather than the operating earnings cycle, so they are not a clean confirmation of NPAT quality. The payout ratio of 67.3% is below the historical mean of 179.7% (range 68.1% to 500.0%), which means the higher dividend is being paid out of materially improved earnings rather than over-distributed as in HY25. Capex of 1.3% of revenue is consistent with a financial.

This briefing cannot assess credit quality or impairment trajectory in detail, since segment-level provisioning and arrears data are not supplied in the structured extraction.