Takeover talk and dividends drive Finance Week 7 winners — AMP the outlier

Pepper Money (ASX:PPM) led the week with 30.11% after a non-binding $2.60-per-share proposal from Challenger and Pepper Group put a takeover on the table. Identitii (ASX:ID8) followed with 20.00% as the Takeovers Panel forced a reopened rights issue and extra disclosure, which can calm fears about control shifting to an underwriter. AMP (ASX:AMP) was the big faller at -15.45% even though it reported higher underlying profit, as investors digested a CEO change and the size of pending class action settlements.

M&A: the bid that moved the tape

Pepper Money’s spike came from one simple thing: a price on the screen. A $2.60 indicative offer gives investors a reference point, even when the buyer can still walk away. The company granted exclusivity for due diligence, which usually means the buyer gets private access to numbers before deciding whether to sign a deal. Not all big jumps are about a bid. Identitii’s move was driven by process and trust. The Panel criticised the rights issue set-up and ordered a re-open with clearer information and withdrawal rights. In plain terms, that reduces the chance that small shareholders get diluted (pushed to a smaller slice of the company) without a fair chance to participate.

Banks: dividends, capital buffers, and cost-cutting stories

Commonwealth Bank of Australia (ASX:CBA) rose 10.88% after a strong half-year result, a 10-cent lift in the interim dividend to $2.35, and a CET1 ratio of 12.3%. CET1 is the bank’s core safety buffer. A higher number means more loss-absorbing capital if loans go bad. ANZ Group (ASX:ANZ) added 10.48% after reporting a sharp jump in quarterly cash profit, alongside progress on job cuts. Investors often reward banks when costs fall, because it can lift profits even if revenue growth is modest. Westpac (ASX:WBC) gained 2.76% on a steady Q1 result and a plan to sell its $19.6 billion RAMS mortgage portfolio. Selling a loan book can simplify the business and free up capital, but it can also reduce future interest income. The market read this update as controlled rather than urgent.

Tech and AI spend: investors want payback, not just promises

A lot of financial firms are spending on AI, cloud and new platforms. That matters because it hits costs now, but it can reduce manual work later. CBA pointed to technology and AI investment as a driver of customer experience and efficiency. Macquarie Group (ASX:MQG) rose 4.01% after highlighting AI and cloud migration alongside a strong capital surplus of about A$7.5 billion and active buybacks. The ASX (ASX:ASX) fell -2.72% even with solid revenue growth, because the ASIC inquiry and technology overhaul come with real bills and reputational risk. It also flagged a lower dividend payout ratio for the next few dividends, which matters to income-focused holders. Computershare (ASX:CPU) slipped -2.90% despite higher EPS and a bigger dividend, as investors weighed moving parts such as margin income pressure and costs linked to the UK Mortgage Services exit. In plain English: the business is still growing, but some easy earnings from interest rates are fading.

Insurers and funds: payouts rise, but weather and flows still bite

Insurance Australia Group (ASX:IAG) dropped -11.13% after reporting a 35% fall in net profit, even though its underlying insurance profit rose and it announced a $200 million buyback. Investors cared about natural peril claims and acquisition integration costs. In simple terms, big weather bills can wipe out a lot of premium income. Across listed funds and investment companies, the tone was more upbeat: several lifted dividends after strong portfolio returns, including WAM Leaders (ASX:WLE), Argo (ASX:ARG) and Future Generation Global (ASX:FGG). Revolution Private Credit Income Trust (ASX:REV) raised $60 million via placement to buy more senior secured loans. That can lift future income, but it also adds pressure to deploy new money without lowering lending standards.