Regulatory Scrutiny Clouds EQT’s Strong FY25 as ASIC Targets Subsidiary ETSL
EQT Holdings Limited reported a robust 60% increase in net profit after tax for FY25, completing a strategic transformation while navigating significant regulatory challenges. The company outlined a growth-focused strategy for FY26, emphasizing digital innovation and margin improvement.
- 60% increase in net profit after tax to $33.2 million
- 28% growth in funds under management, administration, and supervision to $254 billion
- Completion of three-year strategic transformation including AET integration and technology modernization
- Ongoing ASIC legal action against subsidiary ETSL related to Shield Master Fund losses
- FY26 priorities include digital solutions, regulatory compliance, and inorganic growth opportunities
Strong Financial Performance Amid Transformation
EQT Holdings Limited (ASX, EQT) delivered a standout financial year in FY25, reporting a 60% jump in net profit after tax to $33.2 million and a 28% increase in funds under management, administration, and supervision (FUMAS) to $254 billion. These results capped off a three-year strategic transformation focused on market leadership in trustee services, technology modernization, and expansion in corporate and superannuation trustee services.
The company’s Managing Director Mick O’Brien highlighted the successful integration of the Australian Executor Trustees (AET) business and the rollout of a new trustee platform, NavOne, alongside cloud migration and cybersecurity upgrades. These investments underpin EQT’s ambition to be Australia’s leading private trustee, delivering both operational efficiency and enhanced client service.
Navigating Regulatory Challenges
ETSL denies any breach of legal obligations and is defending the claims, while actively supporting affected members through remediation efforts and exploring compensation avenues. The company emphasized that ETSL was not involved in the operation or management of the failed schemes and that member investments were made on financial advisers’ directions.
Strategic Outlook and Market Position
Looking ahead to FY26, EQT plans to leverage its market-leading position to capture ongoing growth, particularly in Corporate Trustee Services where demand remains strong. The company will focus on deploying digital solutions to enhance client experience and operational leverage, while managing increased regulatory compliance costs through pricing adjustments.
With a solid balance sheet featuring low gearing at 10.4%, and a leadership team experienced in mergers and acquisitions, EQT is well positioned to pursue inorganic growth opportunities. The company also acknowledges the growing complexity of the regulatory environment and intends to engage proactively with regulators to shape future frameworks.
Balancing Growth with Governance
Chair Carol Schwartz AO underscored the importance of trusteeship in an era of heightened scrutiny and regulatory demands. EQT’s singular focus on independent trustee services sets it apart in the financial ecosystem, especially as industry rationalisation and structural changes create both challenges and tailwinds.
Despite the regulatory headwinds, EQT’s enduring income profile, long-term trustee appointments, and positive correlation with market growth provide a stable foundation. The company’s commitment to technology modernization and a highly engaged workforce further supports its growth ambitions.
Bottom Line?
EQT’s strong FY25 results and strategic clarity position it well, but regulatory risks and margin pressures will test resilience in FY26.
Questions in the middle?
- How will the outcome of ASIC’s legal action against ETSL impact EQT’s financials and reputation?
- What specific pricing strategies will EQT implement to offset rising compliance and governance costs?
- Could EQT pursue further acquisitions to accelerate growth, and in which segments?
