Helia reports $136.5 million nine-month profit and 2.01x capital coverage

Housing slowdown weighs on Helia’s nine-month earnings

Helia Group Limited (ASX:HLI) kept its FY26 guidance intact despite a sharp drop in nine-month profit, as slower home lending, the loss of its Commonwealth Bank of Australia contract and weaker housing conditions continued to squeeze the mortgage insurer’s revenue base.

Statutory net profit after tax fell to $136.5 million for the nine months to 30 September 2026, from $200.9 million a year earlier. Insurance revenue declined 8% to $253.4 million, while gross written premium more than halved to $82.5 million from $176 million. The movement extends the revenue pressure identified in Helia’s half-year profit decline, which was also linked to lower premiums and the expiry of the CBA contract.

Claims turn positive as arrears edge higher

The September quarter produced $5.1 million of total incurred claims, compared with a negative $13.5 million implied by the first-half result. Helia attributed the quarter’s claims outcome to a modest increase in delinquencies and falling house prices, while stressing that year-to-date claims remained negative at $8.4 million because of strong cures and fewer new arrears.

The total portfolio’s 90-day delinquency rate rose four basis points during the quarter to 0.83%. That remains relatively low, but the direction matters for a business whose claims experience depends heavily on mortgage arrears and property values. Helia’s previous quarterly APRA data had shown unusually low claims and negative incurred claims, making the latest movement a shift rather than a deterioration of a comparable magnitude.

Investment income falls as bond yields rise

Investment performance added to the earnings decline. Net investment revenue fell to $47.2 million for the first nine months, from $121.3 million in the prior corresponding period, reflecting realised and unrealised losses from higher bond yields and a smaller investment portfolio. The annualised net investment return was 3.3%, down from 4.7%, although the net running yield improved 130 basis points to 5.2%.

Capital buffer remains well above target

Helia’s capital position provided a counterweight to the weaker operating result. The PCA coverage ratio for Helia Insurance rose to 2.01 times at 30 September, from 1.85 times a year earlier, despite capital management initiatives. That was comfortably above the Board’s target range of 1.4 to 1.6 times APRA’s PCA, although the company noted that the subsidiary ratio differs from the consolidated Helia figure because of intercompany transaction timing.

The figures come from an unreviewed and unaudited APRA lodgement for Helia Insurance, Helia’s main operating entity, rather than a consolidated group result. The lodgement also does not include a full review of claims reserving or related insurance revenue recognition adjustments, so the final FY26 result remains the more complete test of the numbers.

FY26 revenue guidance stays unchanged

Helia retained its FY26 insurance revenue guidance of $330 million to $360 million and continued to expect the total incurred claims ratio to remain well below through-the-cycle average levels. The tension is straightforward: claims are still comparatively contained and capital is strong, but new premium generation is being tested by government-backed deposit schemes, weaker lending activity and the absence of CBA business.