Super trustee business dents Equity Trustees' FY26 results

Equity Trustees (EQT) posted substantial growth in profits in the financial year ending June 30, despite sustaining a $7.5 million loss from its super trustee business over the period.

EQT Group's net profit after tax (NPAT) was $26.4 million, reflecting the $7.5 million loss from the discontinued superannuation trustee services (STS) business, while funds under management, administration and supervision for continuing operations, which includes the trustee and wealth services (TWS) and corporate trustee services (CTS), increased 15.1% to $191.9 billion.

Revenue for both ongoing departments also increased 9.4% to $167 million.

Further, the group declared a final dividend of20 cents per share, fully franked, bringing total FY26 dividends to 76 cents per share, but said it will continue to manage capital "conservatively" while the STS exit process is completed and dividend capacity will "continue to be reviewed."

STS contributed an after-tax loss of $7.5 million during the financial year, including a $13.1 million impairment charge, the group said.

"The result also included $5.4 million of legal and advisory costs associated with the strategic review process, responses to regulatory notices, enhancement of investment governance arrangements and compliance with licence conditions," Equity Trustees said.

Despite ongoing legal issues with ASIC, the assessment of the Shield and First Guardian matters "remains unchanged", with no additional provisions or contingent liabilities recognised beyond those already disclosed.

Net costs associated with Shield and First Guardian matters totalled $3.9 million. The company expects costs associated with the Shield and First Guardian matters to continue through the current financial year.

However, both TWS and CTS delivered "strong" performances in FY26, with TWS revenue increasing 7.7% to $110 million and net profit before tax (NPBT) increasing 24.8% to $36.7 million.

The group said growth was driven by strong momentum across the health and personal injury client portfolio, together with increased estate values and broader demand.

"The result reflects the successful completion of the TWS transformation program and continued benefits from its integrated operating model and technology platform," Equity Trustees said.

"Client satisfaction improved during the year, with further enhancements planned for FY27 including the launch of a client portal, a unified payments process and continued evolution of the estate management service offering."

Meanwhile, CTS onboarded 45 new responsible entity and trustee appointments and 37 new custody appointments. Revenue increased 13.8% to $53.2 million, while NPBT increased 15.3% to $22 million.

The strong margin growth reflected the increased demand for independent trustee services, particularly in the corporate responsible entity market.

FUMAS increased 17.2% to $174.2 billion, supported by new business wins and positive net inflows across existing mandates. The custody business continued to scale strongly, delivering revenue growth of 34.5% to $6.3 million.

The business continued to invest in technology, automation and risk monitoring capabilities to support future growth, operating efficiency and market leadership, the group noted.

Equity Trustees managing director Mick O'Brien said FY26 represented a year of significant achievement despite the challenges emerged from the STS business.

"The group enters FY27 with positive momentum across both TWS and CTS," O'Brien said.

"We continue to see strong demand for our services, underpinned by recurring revenue growth, a healthy pipeline of new appointments and ongoing operating efficiency initiatives.

"The withdrawal from superannuation trusteeship will enable increased management focus and investment in our core businesses, where we see attractive opportunities to extend our market leadership and further improve client outcomes."

Equity Trustees chair Carol Schwartz added: "The board believes this represents an appropriate balance between rewarding shareholders and maintaining financial flexibility during the completion of the STS exit process.

"We remain committed to prudent capital management and will continue to review capital settings as the STS exit progresses and the group's financial position further strengthens."

Earlier this month, the group received non-binding offers from two private equity investors TPG Global and the Melbourne-based BGH Capital.

EQT said it is considering the offers but has advised its shareholders not to take any action at this time.