EQT’s Regulatory Challenges and Client Satisfaction Dip: What’s Next?
EQT Holdings Limited reported a robust FY25 with a 60% jump in net profit and record funds under management, while completing a major acquisition integration and raising dividends.
- Net profit after tax up 60.4% to $33.2 million
- Funds under management, advice and supervision (FUMAS) grew 28% to $254 billion
- Successful integration of Australian Executor Trustees (AET) delivering $10 million in annualised synergies
- Exit from UK and Ireland operations completed
- Final dividend increased to 56 cents per share, full-year dividend up 6.7%
Strong Financial Performance
EQT Holdings Limited (ASX – EQT) has delivered a standout financial year ending 30 June 2025, reporting a 60.4% increase in net profit after tax attributable to equity holders, reaching $33.2 million. This surge was supported by a 7% rise in total revenue to $182.5 million and a 28% expansion in funds under management, advice and supervision (FUMAS) to a record $254 billion.
Strategic Milestones Achieved
The company successfully completed the complex three-year integration of Australian Executor Trustees (AET), a move that has delivered $10 million in annualised synergies. This integration included the migration to modern technology platforms such as NavOne for trustee management and Workday for enterprise resource planning, enhancing operational efficiency and client service capabilities.
Simultaneously, EQT finalized its strategic exit from the UK and Ireland markets, liquidating its subsidiaries and ceasing operations by early 2025. This decision followed a thorough review of the challenging regulatory and competitive landscape overseas.
Dividend Growth and Capital Position
Reflecting the strong earnings growth and successful completion of strategic projects, the Board declared a fully franked final dividend of 56 cents per share, bringing the total dividend for FY25 to 111 cents per share, a 6.7% increase over the prior year. The company maintains a solid capital base with net assets of $403.9 million and a conservative gearing ratio of 10.4%, underscoring financial stability.
Regulatory Environment and Risk Management
EQT continues to navigate a complex regulatory environment, with ongoing investigations by ASIC into certain managed investment schemes where EQT acted as trustee. The company is cooperating fully with regulators and providing support services to affected members. It also faces increased compliance costs driven by evolving prudential standards and regulatory reforms.
Risk management remains a core focus, with EQT emphasizing fiduciary responsibility, operational resilience, and a strong risk culture supported by a comprehensive three lines of defence governance model.
Outlook and Growth Opportunities
Looking ahead, EQT is optimistic about growth prospects, particularly in its Corporate Responsible Entity business and custody of real assets. The company plans to leverage its technology investments to enhance digital workflows, client portals, and automation, aiming to improve productivity and client experience. Additionally, EQT is exploring inorganic growth opportunities to further scale its operations.
Employee engagement remains steady amid transformation, and sustainability initiatives are progressing, with a first Sustainability Report planned for 2027 in line with climate-related disclosure standards.
Bottom Line?
EQT’s strong FY25 performance and strategic execution position it well for growth, but regulatory scrutiny and client satisfaction challenges warrant close monitoring.
Questions in the middle?
- How will ongoing ASIC investigations impact EQT’s reputation and future operations?
- What are the company’s plans to address the slight decline in client satisfaction during the integration period?
- How will rising regulatory compliance costs affect EQT’s pricing and profit margins going forward?
