AMP Limited (AMP) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to AMP's financial results for 2021. Let me start by paying my respects to our First Australians. I'd like to acknowledge the traditional custodians on the land on which we meet today. For me, that is the Gadigal people of the Eora Nation. And I'd like to pay my respects to all custodians of the land's past, present and emerging. I'm disappointed that we are again holding this event virtually in the financial year and to highlight the achievements in what has been a very unusual period. I'm joined today by our CFO, James Georgeson, and CEO of the AMP Capital Private Markets business, Shawn Johnson, who you'll hear from shortly. In November, at our Investor Day, we outlined our strategy for the AMP Limited and Private Markets business in a separated environment. Today, we'll share how the businesses had performed in '21 and give further directions to the outlooks for '22. Before turning to the results, it would be remiss of me not to comment on the environment in which we're operating. COVID continues to impact how we operate our business, although like many we've had and have adapted. We have prioritized support for our people, which is enabling them to continue to work hard to deliver for our clients, shareholders and the community. While COVID has hurt certain sectors of our economy, a broader economic recovery is gathering pace. With this, however, has come concerns of rising inflation and increased interest rates. Upbeat unemployment and wage growth forecasts have brought forward our expectations of the RBA lifting rates. While our house view has been for a rate increase in August, this could come as soon as June or July. We don't expect these increases to impact the economic recovery, but we do expect a slowdown in the property market, and there could still be some share market volatility over the near term. These conditions are front of mind for us as we look ahead over the next 12 to 24 months. We're particularly confident in the resilience of our bank. We benefit from having a quality mortgage book with owner-occupied loans at almost 70% and lower arrears experience. It's now been almost 6 months since I started in the role. In that time, we have set out clear strategic priorities and a path forward for the 2 businesses, which we will demerge this year. Today, you'll see progress and delivery against those priorities. We said we'd focus on growing the bank, and we hit 2x systems growth in Q4. We also said we'd build stronger relationships with external financial advisers, and you'll see 18% growth in inflows in that area. We further simplified and reduced costs in Super, and we're taking steps to accelerate the transformation of advice. We're also on track to deliver on our 3-year $300 million run rate cost-out target set in FY '19. You'll also see that we hit some key milestones for demerger. It's important we continue to deliver on these promises we have made as consistency remains a focus. The progress we've made so far leaves me confident that we have the right strategy in place, and we're building the right team to execute on it. I continue to be impressed by the drive and focus of our people and leadership team and in our ability to attract quality professionals to AMP. We've announced a new CTO for AMP Limited, Felicia Trewin, to drive our focus on data and digital customer experience, strong appointments in our investments and advice teams, and a new head of lending in the bank. In Private Markets, we have new Board appointments and a new CFO, and you'll hear more about that soon. So to today, let's start with an overview of the year. We've achieved a solid underlying NPAT result for FY '21 at $356 million, and it was up almost 53% on '20. This was supported by our bank, which is achieving strong lending growth and which benefited from the release of credit loss provisions due to the improved outlook for the economy. Our focus will be on continued strong lending while managing our NIM. Platforms is also contributing to profit growth, where our focus on investing in technology and increasing our investment options so as to further grow North platform AUM. Performance fees also saw AMP Capital deliver a strong rise in underlying profit. This came from the successful sale of assets in our infrastructure equity business in the last quarter, which delivered strong returns for clients. We've continued to deliver a significant reduction in our cost base to meet our 3-year cost-out target. We've achieved this through organizational restructures in teams and simplifying our infrastructure and technology. And in Advice, we've established a new services model for the Alliance network, and we've had strong buy-in from our advisers on the professional services business we are looking to build. We reported that we closed the FY '21 year with surplus capital of $383 million above our target. There will be material movements in our capital position in the first half '22 as we realize sale proceeds from Resolution Life and Infrastructure Debt and deploy capital to support the previously announced real estate funds as well as the demerger costs. As flagged at our Investor Day, we continue to maintain a conservative approach to our capital management to support our transformation and will not declare a dividend for the '21 year. Demerger is obviously a key focus and priority for us. We have achieved many milestones already and remain on track towards completing the demerger in the first half of '22. We also announced the sale of our Infrastructure Debt business, which allows us to strengthen the balance sheet of both organizations, and we expect this to complete soon. The GEFI sale will also complete in Q1, and the transfer of MAG from AMP Capital to Wealth Management is well progressed with the investment team already transferred. This has established a clear perimeter between AMP Limited and Private Markets. Since our Investor Day in November, we've also established the principles for balance sheet separation, which James will cover, and we have a new brand for Private Markets, which I know Shawn is excited to talk about. On top of demerger, our first half focus will be on accelerating the strategies for both businesses, which I will get into in detail a little later. We have good momentum in our transformation, repositioning our core capabilities to take advantage of the opportunities ahead of us, as we move towards and beyond demerger. I firmly believe that a business is purpose-led, focused on delivering for customers and members, supports its people and is community-minded, will deliver better business performance and shareholder outcomes in the long run. So that's why it's important that we share these key people, customer and stakeholder updates with you. I'll only highlight a few points, though. We've delivered reduced fees across Super and Platforms and achieved good performance for our MySuper Lifecycle members with an average 20% return. We know financial education is a key area where we can play a role, and our intra fund advice team are now delivering free retirement health checks for members in the latter stage of their working life. We've invested in technology to improve the experience for our bank customers, including consistently fast turnaround times in our home loans. On the people side, culture is and remains very important for our continued success. We've been engaging with our people to define our refreshed purpose and values, and I look forward to launching those in the next month. Our employee satisfaction scores lift from 67 to 71 in '21, and we've met our gender targets at Board, middle management and across the workforce generally. Our community initiatives included the delivery of more than half the actions involved in the next phase of our ramp. And the work of our AMP Foundation cannot be ignored where we gave more than $3 million to charities and people last year, making a real difference in the community. So on that note, I'd like to hand over to James to talk through the financials in detail.

Thank you, Alexis, good afternoon all. Today, we'll cover 3 key topics, being the 2021 reported financial results for each of the businesses, certain pro forma financial impacts of the demerger and a summary of our group capital and corporate debt positions. The turnaround in the underlying result we're reporting today reflects the recovery in the profitability following the impact of COVID across most of our businesses in 2020 and the improved performance across most of our divisions this year. You will see today that we've continued with the enhanced disclosures by breaking out the Wealth Management and AMP Capital results into their respective subdivisions. The extra details can be found in our investor report and the appendices to the presentation. On Slide 7, we show the full year '21 profit summary where underlying profit is up 53% to $356 million. The recovery in earnings was largely driven by improvements in the bank from the release of loan loss provisions related to COVID, stronger investment income in our Group Office from our Resolution Life and China investments and performance fees in AMP Capital. Investor markets also helped to support both of our Australian and New Zealand wealth businesses with good growth in AUM. However, you can see our bottom line result includes some large impairments and a number of nonrecurring items, which we have previously announced, totaling $608 million in 2021. Taking all these into account, the bottom line statutory result for the year is a loss of $252 million. Turning to Slide 8, which shows the key items reported below underlying profit. The key items of note here include the client remediation and related costs of $78 million, which reflect the final provisioning the advice remediation lookback program in costs pertaining to the APRA and forceful undertaking, which we committed to at the end of last year. We incurred $133 million of ongoing transformation spend on the $300 million cost-out program. And the impairments announced in November last year was settled at $312 million, comprising of deferred tax asset impairments, impairments of intangibles and the cost of recognizing onerous property lease contracts. As previously guided, we also incurred costs on the demerger of approximately $75 million in the period. And finally, other items, which were a net gain of $11 million across the year relate to the gain on the sale of the New Zealand Precinct joint venture in the first half, mostly offset by the costs associated by the sale of the Resolution stake in the second half. Moving to Slide 9, which summarizes the full year '21 results on a pro forma basis post demerger for both AMP Limited and PMCo. The table illustrates how the group's 2021 reported underlying earnings of $356 million would have been split between AMP Limited, which would have comprised $259 million; and PrivateMarketsCo, which would have comprised $108 million. The split reflects the perimeter changes of moving MAG and CLAMP from AMP Capital to AMP Limited. This moves $57 million of earnings in 2021 to AMP Limited, of which $41 million was for MAG. The table also shows the adjustments to the AMP Capital result to derive the PMCo result, being firstly the removal of the GEFI business, which recorded a net loss of $12 million in 2021. This business has been sold to Macquarie with the transaction expected to settle in the first quarter of this year. The upfront proceeds on that transaction are now expected to be approximately $80 million, reflecting the AUM runoff since the deal announcement in July. Secondly, the removal of the Infrastructure Debt business, which recorded earnings of $1 million across 2021. This business was sold to Ares Management in late December. And the transaction is expected to settle imminently for the full cash consideration of $428 million. And thirdly, the transfer of MAG and CLAMP from AMP Capital to AMP Limited, which removes $57 million of earnings, as already discussed. Moving to AMP Bank on Slide 10, which has performed well. The net profit of $153 million was up 38% on full year '20. The result included the benefit of the reversal of $26 million of pretax loan loss provisions previously taken in respect of COVID. NIM across 2021 actually increased 3 basis points to 162. However, NIM declined in the second half due to the competitive market conditions, as shown in the graph on the right-hand side of this table. This is reflective of the competitive environment with the main drivers of the 18 basis point reduction in the second half being about 8 bps from lower average margins and about 13 bps from a mix impact, which reflects significantly more fixed rate loans written in 2021. Residential mortgages grew 7.7% to $21.7 billion during the year. Mortgage growth was really strong in the second half of the year, including 2.1x systems growth in Q4 and almost 1.4x system growth across the full year. The bank also continued to maintain its focus on costs, with only a marginal increase to $126 million across 2021. As a result, the cost-to-income ratio remained steady at about 39.5%. On the next slide, on Slide 11, we show additional information on the bank and our progress towards growing the book. Pleasingly, we are seeing good momentum. And as you can see from the graph, we saw strong growth in the second half. Arrears rates also continue to perform well. The 30-day arrears rate has improved from 115 basis points to 78 and the 98-day arrears rate has improved from 62 bps to 50 bps. And pleasingly, approval times have improved across the year despite the significant growth in the book. Looking forward for the bank, we continue to see positive mortgage book momentum and are targeting 2x system growth in 2022. However, we will continue to focus on writing mortgages profitably in the face of a continuing competitive lending market. And as such, we are targeting NIM at or around the 150 basis point level subject to market conditions and the interest rate outlook. Turning to Slide 12. We outlined some of the highlights in our Wealth Management business across 2021. Underlying profit decreased 25% to $48 million. This reflects a number of items. Firstly, lower AUM-based revenues following pricing and simplification changes and the cessation of grandfathered remuneration. As well, there was a $27 million impact from the network reshape activities on revenues, and there was an $18 million impact from the impairment of advice-related assets taken in the first half of '21. However, these items were offset by $27 million improvement in variable costs from phasing out adviser support payments, a $28 million improvement in controllable costs and a $12 million improvement from higher investment income on the North Guarantee product. AUM was 8% higher at $134 billion, reflecting the strong performance in investment markets over the last 12 months. Total net cash outflows of $5.2 billion for the year, improved from an outflow of $7.8 billion in 2020. The improvement primarily relates to a number of one-off items that did not repeat in 2021. The 2 main ones of these was the $1.8 billion of lost corporate super mandates and the $1.8 billion of early release of super payments that occurred last year. From the chart, you can see that North is beginning to gain traction with the EFA market with AUM growing strongly and cash flow is building momentum each quarter in 2021. Total Wealth Management revenue margins declined to 66 basis points, a 7 basis point reduction, in line with our guidance. The movement primarily relates to the impact of the Master Trust simplification, pricing changes on our North platform and the cessation of grandfathered remuneration. On Slide 13, we outlined some of the key highlights across each of the subdivisions in 2021. In the Platforms' area, underlying profit of $110 million is $7 million higher than full year '20 due to the impact of favorable investment markets, offsetting the impact of pricing and increased costs. AUM here was up strongly, up 13% to $71.1 billion. Revenue margins did compress from 56 basis points to 50 basis points from the repricing actions we took and the cessation of grandfathered remuneration. In Master Trust, underlying profit of $90 million was $23 million lower than full year '20 due to the repricing changes from our simplification efforts, but were also offset with lower controllable costs. AUM increased modestly here, up 3% to $62.9 billion. However, margins did compress during the period, down 8 basis points to 85, mainly from the ongoing simplification efforts, and this will again impact 2022. In Advice, the loss is $146 million, which is broadly in line with our 2020 result. This year's numbers were impacted by impairments in Advice-related assets. A decline in revenue from the end of grandfathered remuneration and the advice network reshape. Cost to continue to remain a focus with effort ongoing to deliver our ambition of making advice breakeven by 2024. Savings have been achieved across both variable and controllable costs from the phasing out of adviser support payments, the divestment of our own advice network and the ongoing cost-out activity within the business. As a result, the second half results have already shown improvement with a loss of $61 million in the second half versus $85 million for the first half. On the next slide, on Slide 14, we present the pro forma split of the Australian Wealth Management division post the transfer of the MAG business from AMP Capital. The transition of MAG into Wealth Management will affect both the Platforms and Master Trust businesses. The MAG transition would improve the Master Trust 2021 result by approximately $21 million and the Platforms 2021 result by $13 million. Going forward, the MAG transition is expected to emerge approximately $55 million of higher revenues mainly in Platforms, $45 million of lower investment management expenses, mainly in Master Trust, and $70 million higher controllable costs. Again we do expect the $41 million uplift in MAG in 2021 will moderate a little in 2022, given the lower opening AUM position and some expected cash outflows and margin compression in that division. On Slide 15, we move to our New Zealand results. Our New Zealand business continues to perform well, with operating earnings up 11% to $39 million. The result was assisted by stronger investment markets and good cost performance. During the year, the change in investment strategy towards an index-based investment philosophy was successfully implemented. Closing AUM of $12.2 billion decreased only modestly from full year '20. This small reduction is despite the conclusion of our KiwiSaver default status, which resulted in a large net cash outflow position for the year. Strong investment markets helped offset the cash outflows. Turning to Slide 16, which shows our AMP Capital results. The financial results were up with underlying profit of $154 million, an increase of 18%. There are a number of trends impacting the results. These include AUM-based revenues fell 3% from both lower average AUM from cash outflows and a number of fee concessions, which were implemented to stabilize the business. However, these items were offset by higher performance and transaction fees, including the recognition of $58 million in performance fees in Q4 following the sale of 2 large infrastructure equity investments, ESVAGT and Angel Trains. Shawn will talk about these in a second. Seed and sponsor income was up $18 million, up -- was $18 million, up from $6 million in 2020. This was driven by a post-COVID recovery in real asset valuations across the portfolio as well as strong performance in certain individual assets. Controllable costs across AMP Capital decreased 2% to $515 million, reflecting tight cost control. Net cash outflows were $27.6 billion for the year. This outflow included $9.2 billion from the transfer of New Zealand Wealth Management's investment mandate to BlackRock, $4.2 billion from the loss of the AMP Capital Diversified Property Fund to Dexus and a $4.1 billion -- or total of $4.1 billion of divestments of assets in our Infrastructure series returned to investors. As a result of the cash outflows in the year, average AUM decreased by approximately $10 billion to $183.8 billion at the end of this year. On Slide 17, we show the breakdown of the main group items within the Group office division. Group office costs reduced 22% to $66 million, reflecting the benefits of the cost-out program. Both periods have been updated for the revised cost allocations as detailed in our investor report. Interest expense reduced to $51 million, benefiting from the $700 million pay down in corporate debt through the year and lower weighted average cost of debt. And investment income more than doubled to $79 million, reflecting the higher cash on hand following the sale of AMP Life, more favorable derivative impacts from last year, improved earnings from our China investments and a half year investment return from our Resolution Life stake. Heading into 2022, other investment income will be lower following the sale of our interest in the Resolution Life stake and reduction in surplus liquidity. Turning to controllable costs on Slide 18. This chart outlines the controllable cost movements across the year, which shows a 7% reduction, ending the year at $775 million, in line with our guidance. The key movements during the year include: the $11 million of COVID-related costs in full year '20, which did not repeat this year. A total of $52 million of CPI reinvestment and regulatory and compliance cost increases across the year. But offsetting this, a total of $100 million of reductions from the cost-out program, reflecting actions we took last in 2020 and 2021. The $100 million comprises $39 million from simplifying organizational structures, $52 million from simplifying our infrastructure and technology assets, and $9 million from reducing our total property footprint. Overall, this is a strong result for costs with the actions we've been taking to reduce costs emerging as net cost reductions this year. We've now delivered approximately $260 million of the $300 million cost-out program. And in full year '20, we are targeting controllable costs, excluding AMP Capital, of $725 million or $795 million when we factor in the transition of MAG, a further $50 million reduction on this year. On Slide 19, we show the capital movements in 2021. Surplus capital as at the 31st of December is $383 million surplus to our target requirements. The first 3 columns reflect the $252 million statutory loss which AMP reported for the year. And as we noted in November, a portion of the impairment had no capital impact. So this is less than what appears in the P&L. The group has been able to utilize increased utilization of existing hybrid instruments resulting in a $250 million increase to the surplus capital position. These instruments have previously backed the AMP Life capital base. The previously announced share buyback was completed during Q2 with $196 million of surplus capital used. There was $29 million of business capital usage, mainly driven by the ongoing growth in the bank. The $383 million surplus at December will be used to invest in the transformation strategy, support the business growth, and to complete the various separation activities to demerge the Private Markets business. Given this, and as previously guided, the Board has resolved not to declare a final 2021 dividend. A prudent approach has been taken in capital in the lead up to the demerger. And as Alexis alluded to, over on the next slide on Page 20, we've highlighted a number of the large capital movements that we expect this year. In the first half of '22, we expect a number of the previously announced transactions to settle, being the sale of the Resolution Life stake as well as the proceeds from the Infrastructure Debt sale that we announced only in December last year. Offsetting these amounts are approximately $100 million of the residual cost-out spend expected across the full year of 2022, the $470 million of capital required to support the real estate business, $120 million of the demerger costs as we previously guided, and also the transfer of between $250 million and $350 million of surplus capital required to set up the stand-alone Private Markets business, which also -- which includes the portion of the AMP Capital surplus as at the end of December, which was $241 million. The final balance sheet separation to affect the demerger is still being finalized. However, the chart here shows the major movements we currently respect. The workers will advance, but does remain subject to regulatory and rating agency reviews. At demerger, we expect to create 2 sustainable capital structures such that the private markets business will carry minimal debt and will have liquidity for future sponsor investments and the AMP Limited Group will further deleverage commencement with the reduction in the size of the group as well as having sufficient capital for transformation and future growth. As a result, AMP Limited is expected to maintain an up to 20% passive minority shareholding in PrivateMarketsCo to provide balance sheet resources and financial flexibility. On Slide 21, this highlights our summary of our guidance points for the various businesses across 2022. In Australian Wealth Management, we expect earnings to be broadly flat as the impact of the Master Trust simplification and Advice network reshape is offset by cost-out in the business. We expect approximately 10 bps of revenue margin across the wealth business in 2022. At a divisional level, we expect platform revenue margins to remain at approximately 50 basis points with the impact of the pricing changes taken in mid-2021, mostly offset by MAG uplifts. In the Master Trust business, we expect revenue margins to fall from 85 bps to 65 bps following the full run rate impact of the Master Trust simplification actions that were taken only in Q3 of this year -- sorry, of 2021. However, the transfer of MAG will deliver approximately 7 bps of investment management expense reduction. And as a result, we expect gross margins being AUM-based revenue less investment management expenses at the total wealth management level to reduce from 44 bps to 41 bps in full year '20, including those MAG impacts. With AMP Bank, we continue to focus on driving stronger mortgage growth this year, targeting 2x system growth for the full year of 2022. We do expect additional pressure with margins and are targeting a NIM over the course of the year of approximately 150 basis points. From an earnings perspective for the bank, the $26 million of loan loss provision reversals will not repeat in 2022. AMP Capital continues to focus on delivering for clients and completing the planned demerger in the first half of '22. From an earnings perspective, AUM-based revenue is expected to be lower. This reflects the full year impact of the fee discounts and the loss of ADPF, and we're expecting a more subdued outlook for the performance fees in full year 2022 after a strong end to this year. New Zealand is performing well. However, we expect NPAT to be approximately 10% lower in full year '22 given ongoing margin pressures and lower general insurance revenues as the new 5-year contract removes insurance profit share revenues. Stepping back, the full year '21 results show a good recovery in earnings, which was helped by favorable investment markets benefited with a strong performance in transaction fees and higher investment income on our strategic investments. A number of payments have been taken to reset the balance sheet ahead of the demerger this year and aligning with the revised growth strategy of the business. We are beginning to see the benefits from the cost-out program with the business delivering a net $50 million reduction in cost in 2021, and we expect to deliver the same reduction again in 2022. So another year of heavy lifting across the organization. We've continued to simplify and reset the organization while making good progress towards the demerger of PMCo at the same time. I'll now hand to Alexis to take us through an update on our strategic priorities.

Thanks, James. Last November, we outlined our strategic priorities. And I just want to remind you of those. Given it wasn't long ago, I'll just give a few updates on where early progress is being made. Let's start with our strategic approach. The focus is reposition AMP with a focus on growth in those 2 areas of Bank and Platforms and delivering stable earnings for Master Trust in New Zealand as well as transforming our Advice areas. Simplify through the execution of the demerger and rightsizing the operating model, also disciplined capital management. And we are exploring new business opportunities, which for us right now includes establishing digital direct-to-consumer propositions, fintech partnering and developing a leading position in retirement. There are no changes to these progresses. This leads us to our 6 priorities. And again, no new news, complete the demerger, reduce the cost base, grow our bank and focus on those EFA flows, explore new business opportunities and absolutely focus on being a purpose-led organization with values that we all live by. So let me just examine each of these in a little more detail. Firstly, the demerger. There are a number of critical pieces in delivering the demerger. We've delivered on important meetings in terms of operational separation including Board, key management team appointments in Private Markets, establishing the MEP, and of course, the new brand. We now need to focus on completing the MAG transfer, the sale of GEFI, finalizing the ID sale. We also continue to establish PMCo to be ready for listing, establishing the governance, further Board appointments and the rollout of the new brand. We will also publish our scheme of arrangement information in April as well as preparing for our court and shareholder meetings and a share consolidation. Now to the cost base. We've demonstrated our commitment and capability to meet our cost targets. We have achieved $260 million of cumulative gross cost savings since 2019, many were on track to meet the $300 million by FY '22. We will deliver that additional $40 million of net cost-out this year to complete the existing program. An additional $115 million of net cost will be taken out between now and '24, and I'm absolutely committed to delivering on this. So to the bank. I think I've made it pretty clear how important the bank is for our future direction. We are well positioned, benefiting from the digital investments we've made to reduce loan turnaround times and increase customer experience. Our auto credit decisioning rate has increased by 75% to be above 60% for '21. And that means faster and more consistent approvals, which will support our growth ambitions. This year, we are also targeting to improve our customer Time to Yes for mortgage approvals by 30%. We do aim to maintain our deposit to loan ratio of more than 75%, and we're in a good position as it currently sits at about 81%. With the potential for slower conditions in the housing market, we will be focused on maintaining credit quality while we grow our home loan book. We're also expanding our business development team to support growth outside of New South Wales, where we have been strong. It's also really important to us that while we grow we continue to manage our NIM in a very competitive environment. So to financial advisers. We're committed to making the Platform business more competitive and attractive to all advisers, particularly targeting those external financial advisers. As we've shown today, there is good momentum here. We've continued to develop our positioning in Platforms by addressing the managed equity portfolio deficiency, competitive pricing and developing our administrative capability. This year, we are focused on a new retirement solution on the North platform, and we've brought some great expertise into the team to help achieve this. We'll also be transforming North sales and service capability and building on the work already done to the Platforms digital experience and functionality. So to new business opportunities. It's important that we look at ways to create new growth opportunities within the business. As I said, we're exploring a digital direct-to-consumer mortgage offer in our bank, and we see the direct-to-consumer channel down the track also having a role in our wealth management business. As I mentioned at the beginning, we're very happy to have a new CTO starting in the next few weeks, who will support us in helping build our data analytics capability to better target and serve our customers. And finally, to purpose and values. I think it is important to highlight the work that we have done on purpose, values and culture. We've delivered inclusive leadership training to all employees, launched a new inclusion and diversity policy and uplifted our employee support capabilities. As I've mentioned before, my experiences of the culture at AMP has been a positive one, and I set a group of people who are committed to having AMP succeed. We'll continue to build on the foundations for high-performance culture, and the team needs to get behind a shared purpose and values. We have been engaging with employees and customers on this, and so I'm very much looking forward to launching that soon. I now want to hand over to Shawn for an update on AMP Capital Private Markets.

Thanks, Lex, and hello, everyone. First, I want to say, yes, I am in Australia. So thank you for that. And I really want to thank Lex and James. It's been wonderful to spend some time face-to-face rather than hours on a video screen in all hours of the day. So thank you for that. Second, I want to thank the team within AMP and AMP Capital for such a warm welcome since I've been here. It's really been delightful, and everyone in the last couple of weeks seems to be apologizing for the weather, which -- to which I reply everything in life is relative. The day I left it was minus 28 degrees C in my driveway. And so I love a little rain in Sydney. It's perfectly fine. With that, I have a few slides to share with you to update you on the Private Markets business. We'll go through the second half of 2021 and some updates on 2022, and what we're planning on, and then I'll turn back to Lex. The first thing to update you on is the Infrastructure Debt sale that occurred at the end of December. So what was sold was our Infrastructure Debt business, principally out of New York and London, total of $7 billion in assets under management. The transaction perimeter of that to explain it were our open-ended funds. Those are ones that were currently open in fundraise mode. We sold the contractual management rights along with the Seed and Sponsor capital in the carried -- future carried interest that may accrue. And then we sold the management rights for those funds that were closed, meaning they were already fully invested. We retained our Seed and Sponsor capital in those funds and our future carried interest and simply named Ares as the sub-adviser for those funds. The expenses moving across are the direct expenses of the investment team themselves and the operations and finance teams that directly support that business. Some of the allocated costs we will retain which will be absorbed by the rest of the business. On the financial summary, it was a cash payment where we received $428 million. And then because we maintained our Seed and Sponsor capital and our carried interest, we'll receive approximately $66 million in Sponsor capital coming back in the years ahead and should carry interest come back if we estimate about $84 million. But of course, that's subject to the performance hurdles that exist in those funds, which have to be met in the coming years. The total economic value of that is about $578 million, all totaled. As we look at the business that remains at PrivateMarketsCo, we are now about $42 billion in assets broken up between our real estate platform, largely domestic here in Australia, and our infrastructure equity business, which is both a core infrastructure business here in Australia and our global infrastructure business, principally based in London and New York. You see the assets are not quite 50-50. The real estate business is slightly larger. There's a team of real estate professionals of about 500 people in that business. We have over 50 investment professionals in our infrastructure equity business. Our real estate business has 59 institutional clients located primarily here in Australia, some of the large superannuation funds, obviously. And our infrastructure equity business has over 245 institutional clients around the world. Both businesses are very -- in the top 10 of their market categories. And you can see the sector expertise of those businesses at the bottom of the slide. The historical earnings profile of the business, this has been updated to reflect the exiting of the Infrastructure Debt business. So these data points are updated. And you can see both -- each of the areas of revenue, base management fees, our non-AUM-based management fees, our performance and transaction fees, the carried interest that we might receive, and our Seed and Sponsor revenue broken out on the bar charts. Pretty consistent EBIT margin business. We should fall below that going forward in 2022, recovering more in the 2023 timeframe. Recent developments, as was alluded to earlier, the Angel Trains and ESVAGT dispositions took place. Those were very positive results for our clients. Angel Trains was part of the old British rail system. The ESVAGT is an offshore oil platform and offshore wind farm servicing business in Europe. We did lose the Diversified Property Fund this year. That's approximately $26 million in revenue. We have given some fee concessions in our core infrastructure and real estate business to protect those businesses. That's about $30 million annually, although it reduces slightly beginning in 2023. We have had subdued fundraising activities in 2021 and 2022, just based upon the status of the demerger. I did want to update you to explain the volatile nature of parts of our income statement. This is a historical look at 3 line items in our P&L, performance fees, carried interest and transaction fees. So you can see that for 2019, 2020 and 2021. The performance fees, if you just look at those bars in each of the years, it goes from $40 million to $17 million to $8 million. That does reflect performance in investment assets that may have been impacted by COVID, such as airports, for example. Our carried interest is perhaps the most volatile line. You can see there were no carried interest payments in 2019. In 2020, we had a carried interest payment that was related to the debt business. And then in 2021, as James alluded to earlier, there was $58 million in carried interest booked in the fourth quarter. Our transaction fees also are related to activities that we received compensation for individual transactions, and those also vary from year-to-year. So this does give you some idea of how volatile that part of the income statement is. This is the same slide that I shared previously about our strategy. First is operational separation, which took place in December. We have all of our TSAs negotiated in place with the group. Second, we're simplifying the business. The Infrastructure Debt sale is part of that. We have implemented a global organizational structure, and we do have cost efficiencies to take out of the business, which I'll touch in a moment. Next, we will then grow our client base. We do have to scale the existing funds, go back into the market for our global infrastructure series after demerger. And lastly, we'll be launching new products in the future to diversify our product offering across our client base. It's all enabled by a strong balance sheet and a cost management discipline within the firm. ESG is embedded across everything that we do. And we have a great group of talented people, and our remuneration plan is now in place. Looking at the second half of 2021 and what was accomplished. Yes, I did join. We have GEFI business sold. We brought in our new Chairman designate in Patrick Snowball, well known to some of you. Andy Fay will be our Deputy Chairman designate. I've already spent time working with both of them, finalized our operational model for PrivateMarketsCo. Our management equity pan has been announced and is in place and granted to key employees with the transfer of the MAG business took place in December and we also sold the infrastructure debt platform in December. Going forward in 2022, we've announced Nadine Lennie as the new Chief Financial Officer. She'll start in April. Thrilled with that announcement and glad to have her joining the team. Our new brand announcement, I'll just talk about in a moment. Our Infrastructure Debt sale should be finalized quite imminently. The global equity and fixed income sales should be completed here in the first quarter. The public markets operation will then be transferred over to AMP as well. We'll have a couple of new nonexecutive directors appointed to PrivateMarketsCo the first half of 2022 prior to our demerger. The Annual General Meeting will take place and the shareholder scheme booklet approved in May. And then the private markets listing will occur in June of 2022. To touch on the transition of our cost base, you can see that 2020 year-end costs were $522 million for AMP Capital. This bar chart shows you where the MAG transfer is happening and where that comes out at $67 million. There's $26 million associated with the GEFI sale. ID sale, principally the direct cost will go out. Then the residual MAG and GEFI cost will be transferred over to AMP Australia. The $74 million is the cost target that we have to take out within AMP Capital that's well underway, and we know exactly where to go get those costs from. And then our establishment cost is actually an add back. It will take us about $10 million to $15 million to stand up as a stand-alone business, targeting a forward cost run rate of $275 million to $280 million by the time we get to the beginning of 2023. Now our client base to update you post the Infra Debt sale. We'll have approximately 297 clients, strong growth offshore. 61% of our institutional clients are actually outside of Australia. You'll notice in the middle circle there, 64% of our assets are actually from Australian clients. That represents a smaller group of clients but larger mandates. On the right-hand side, the majority of our clients are actually global pension fund clients. Interestingly, the U.S. market is largely untapped by our business, which presents us with a significant opportunity. We have had strong performance raising assets from clients in South Korea, Hong Kong and Singapore, and I expect we will continue to have good success across Asia. Europe is actually our most established market outside of Australia. As we look at the business units themselves, the real estate platform had accomplished a great many things in 2021. The retail trust recapitalization at $2.2 billion, I understand is the largest of its kind in the history of Australia. AMP Capital also was retained as the trustee and manager for AWOF. We delivered $800 million in the Karrinyup Shopping Centre, achieved delivery of our Quay Quarter Tower. I just toured the Quay Quarter, really a tremendous building. And took our ownership position in Brookfield Place, all in the second half of 2021. In our infrastructure equity business, we were retained as the manager for CommIF. We accomplished a number of transactions and investments in -- across our core infrastructure business here in Australia. As I mentioned earlier, we sold our Angel Trains position and ESVAGT out of our core -- our global infrastructure business. And now over 50% of the GIF I fund has been returned to investors. As we look to real estate in 2022, we'll be raising new funds in that and also securing some separate accounts in that business going forward and also be deploying new capital. In our infrastructure equity business following our demerger, there will be a fundraise to go towards GIF III. We are looking at diversifying our geographic profile on our fund client base in Australia and commencing a global core infrastructure launch as well. Lastly, I'd like to talk about our new brand, Collimate. This is a wonderful milestone for the team and for the business. The word Collimate is actually a scientific word. It means to align the rays of light, and it talks to the way in which we want to align ourselves with our clients. For those of you that happen to study optics or look in telescopes or a camera person, a lens which perfectly collimates light is set to have a focal length of infinity. So it talks about our vision for the future, our long-term orientation in terms of value creation and in alignment with our clients. It incorporates a lot of research with our team. Over 400 people have participated in developing our client value proposition, our employee value proposition, all of which will be rolled out as we go forward towards the merger. And today really begins the beginning of that with the announcement of the new brand. So I'm going to turn it back now to Lex. Thank you.

Thank you very much, Shawn. I love hearing an investment guy talk about a new brand. So thank you. I know we want to get to questions. But just before we do that, I would like to reiterate that we have delivered a solid underlying result. We show the strength of the 2 businesses. We have the banking platforms that are well positioned for growth, and we have a clear plan for how we'll drive improved performance out of our Super and Advice businesses. We have delivered our cost-out targets, and we have clear plans for achieving the further $40 million of net cost-out in the next 12 months. Executing the demerger remains a clear priority as is readying these 2 businesses to perform strongly as separate entities. I'm pleased with the progress we have made, and I'm energized by the work we have ahead of us. And with that, we'll now hand over to the moderator for Q&A. So thank you.

[Operator Instructions] Your first question comes from Laf Sotiriou from MST.

Laf Sotiriou from MST. First up, a question on PMCo and better understanding why AMP Group wishes to retain a 20% stake. I don't really get it. It's effectively a blocking state and may limit the demerged entity upside. It also implies that you still want some level of control or perhaps influence over the business. So the question is why? And as part of this, has AMP opened the books of PMCo to potential bidders as per media reports?

Thanks very much for that question, Laf. And I think we've always been pretty clear that we may retain a stake up to 20%. The reasons for maintaining that stake have not been -- have not changed over the last 6 months, and it would be for balance sheet and financial stability across those 2 businesses. I've been very clear in the past, and I'll be clear again today that AMP Limited has no interest in maintaining that stake over the longer term, but we would want to work with PrivateMarketsCo or Collimate to bring down that stake over time. And we wouldn't be looking for control or Board positions in the interim. So certainly want to allow Collimate to grow and flourish by itself. So it would only be for that financial and balance sheet stability over the short to medium term. In relation to your question on speculation in the papers, and you'll see in our media release that it's not unusual. We're in the middle of a demerger. We've got scheme booklets coming out in April. We published quite a lot of information in our investor roadshow in November on each of the individual businesses. And we've just sold the Infrastructure Debt business in December. And so there has been some interest in relation to the PMCo business. You can see that we're pushing ahead with the demerger. And I've talked about that at length today. And if there was any substantial interest, we would, of course, consider that in light of our fiduciary responsibilities.

Excellent. And just last question relates to the target capital requirement about the MRR. So it grew over the year from $738 million to $813 million. Can you talk me through what's behind this growth? And more specifically, how we should think about this going forward? It's quite a large buffer that sits on the top. So effectively, what's the process for determining what we should do?

Thanks for that question. James, would you like to take it?

Yes. Thanks, Lex. Thanks, Laf. So the capital -- or the target capital requirement did increase through the year. We would expect some of the growth in the bank and some of the investments in AMP Capital. Seed and Sponsor would also add a little bit to that buffer requirement as those capital deployments become larger. We go back and develop the capital framework for each division. So we do a sort of buildup of the capital requirements. So we look at what's the minimum regulatory requirement and then what are the appropriate targets that we put by each division and then when we sum those up to the group level. Clearly, as we go through the demerger, we'll look at all of those again, but it does -- it is built up by divisional by divisional basis. So actually, we kind of have got a fairly good view of where that would be going forward, which is really pretty much where it sits today for the different divisions. And one of the reasons it's sort of -- it looks more sizable than maybe what it is, is that for a number of the subsidiaries, so in particular sort of New Zealand Wealth or AMP Capital, their actual regulatory requirement is very, very minor. And in New Zealand's case, it's actually zero because it's operating a very basic wealth manager. So we have to -- the target capital is really sometimes replicating what a regulatory requirement will be for some of those non-APRA-regulated entities. So hopefully, Laf that gives you a bit of a feel for how we come up with it.

But just -- I mean, just a follow on, are you conservative with this -- with setting of this $813 million? Or do you think this is broadly the parameters for their respective businesses we should expect going forward?

I would hope we've got a balance of efficiency and conservatism there. So I think what we're saying is we wouldn't expect a wholesale revision to these targets for each of the divisions that we report on Page 26 of our investor report. We would sort of see them to be fairly similar going forward post the demerger. So we're not expecting either a big uptick or a big reduction.

Your next question comes from Kieren Chidgey from Jarden.

Just a couple of questions. Maybe Alexis starting on Australian Wealth Management and the Advice component within that, we lost around $150 million through that part of the business this year. I know there were some one-offs in there, but you've got a medium-term ambition of obviously getting that back to breakeven, I think, by FY '24. How are you thinking about sort of the near-term trajectory, particularly given some of the adviser exits we saw over the second half of last year, I think, sort of your adviser count reduced by maybe another 250 over second half? Can you give a little bit of clarity how you're thinking about that profile between now and FY '24?

Yes. Firstly, I would expect that the reshape of the advice network in terms of the number of practices and advisers. I'm not saying there won't be changes, but I think that's largely complete. So then it comes to how do we make that space more efficient. Firstly, I think there's a couple of things. You'll note that we've pushed down a lot of our group costs into the individual units, and we did that because I wanted to make sure that we're making the right decisions at the business unit level. So I do think there's a real opportunity to take out costs from that space. There won't all be costs in the frontline advice area. There are a lot of the corporate functions as well, which is why you're going to see benefits across some of the other businesses. And I think we're all committed to making sure those cost reductions occur. So I think that's the first thing and probably the most material. The second thing is Matt Lawler and the team have really been quite transparent about the fact that fees need to increase in that business for the services that we do provide to the network. And they will, over the next few years, see an increase in fees, in fact, doubling of fees over the next couple of years. So I think it's a combination of those. If I look into FY '22, a lot of it will come through the cost reduction, which is the support footprint reducing and those corporate functions reducing in the demergered environment.

Yes. Lex, I'll just add to that. Kieren, you're right. We guided in November that we'd probably reduced the loss by about half in 2022. That's sort of what our -- what we're targeting. So we did $146 million this year, so we'd be sort of targeting the mid-70s. You're right, there's a couple of one-off headwinds in 2021. We had advice asset impairments in the first half. That was $18 million pretax. And our owned advice channel, which we sold at the end of last year, had a loss of $16 million aftertax. So there's probably $30 million of one-off costs in 2021 that definitely won't repeat. And we'll see that heavy cost-out work focusing on advice in the first half of this year and into the second half. So that's why we sort of guided in November, and we're still confident in those plans to get to about half the loss. And you can sort of see the improved trajectory from first half, second half already?

Yes. Okay. And just still sticking within Australian Wealth Management. If I can just clarify your guidance for the fee margin there of 55 basis points. So are you saying -- does that -- how does MAG sort of fade into that? Is that included within that number?

Yes. So the MAG impact is factored in there. It's much more benefits at the revenue level, the Platforms business. So we're saying Platforms will sit at about 50 still again in 2022. So we probably had about 3 basis points of compression coming through and MAG will offset that, so it would be a net 50, whereas Master Trust will drop from sort of 85 to 65. There's a very limited offset there. And so that translates into an overall -- about 10 basis points -- 10 or 11 basis points from this year. So sort of 66 down to about the 55-56 range, and that's net of MAG. Hopefully, all the guidance we put in the document is trying to pick up where we get to from a go-forward perspective, including the MAG impacts.

Okay. And ex MAG, I mean roughly, what would that be?

It's probably -- probably the MAG impact is about 3 to 4 basis points uplift. So it would be sort of at the little lower point of around approximately 50, just about 51 if it wasn't for MAG.

Okay. And just a third and final question on AMP Capital. That's for Shawn. Just noting the fourth quarter, where we saw some still fairly elevated clients at outflows, I think, in the order of $3.8 billion. So just wondering if you can unpack some of the trends that you're seeing in that part of the business? And then secondly, on the carried interest, which is very strong this period, it just seemed a little bit at odds with some of the prior indications that we should be expecting a far more moderate year-end '21. So just wondering if you can offer some thoughts as to how we should be thinking about that for '22.

Yes. Let me ask Shawn to answer that question for you, Kieren.

Sure. The first part, the fund outflow of $3.8 billion, some of that will, of course, be related to selling assets. Those were quite large assets. And the other is -- the carried interest happens when it's time for the market and bids happen in assets. So while we kind of have rough ideas about where we may want to sell things out of a private fund, it's also dependent upon what the market environment is for buyers in those funds. So it's very difficult to predict when those things may or may not occur, neither were necessarily scheduled to occur in the fourth quarter, but it turned out that, that was the opportune time to sell those assets on behalf of clients. So that I don't anticipate necessarily any carry in 2022, but it's also driven on what the other side of the market is.

Moderator, do we have another question?

Your next question comes from Nigel Pittaway from Citi.

Just first of all, can I ask about capital in the bank. Obviously, you're targeting growth there, and it's already had an impact, obviously, on the CET1 ratios, pushing it down. So I guess the question is how much capital are you prepared to commit to growth -- growing the bank over the next sort of year or so?

So Nigel, when we've done our modeling for that growth targets in the bank, we'd be looking to reinvest a lot of the earnings that we generate through the next 12 or 18 months in growing the mortgage book. So growing it at circa 2x system is which our targets would mean that we'd be using most of the earnings that the bank is generating to reinvest. So not looking to grow or use capital over and above what the bank can generate, but that will be about sort of where we would see it.

Okay. And then a couple of questions on the Private Capital business. I mean, first of all, I mean, as you went through it, you said that you're sort of pretty much knew where the $74 million of cost-out comes from. So I was wondering if you can give us a bit more color as to where that might be. And then secondly, just on the sort of carried interest as a result of the Infrastructure Debt sale, I mean I know it's very difficult, but if your performance -- the hurdles are met, how does that $84 million pan out in terms of time? Is it sort of all 3 years hence? Or does some of it come in a bit earlier than that?

Thanks for those questions. I'll ask Shawn to answer. I know what his answer will be in relation to carried interest, but I'll let him talk to it.

Yes. The carried interest question I'll answer first. The -- I assume you're talking about the carried interest as it relates to the sponsor capital that remains in the Infra Debt business. So that carry forward number. Those are 10-year essentially long funds. But in the Infra Debt structure, those are mezzanine debt funds that finance infrastructure acquisitions. So there's actually a 3-year make-whole provision. So generally, when those funds are put out, you don't get refinanced out of those until post 3 years. So right now, the return of sponsor and any carry should it occur is in 3 or 4 or 5 years down the path. There may be some that occur before that if we get above the return criteria, but that's just a representative value of kind of the present value of what we expect may occur based on the Funds II, III and IV, which are fully invested. Your first question, which had to do with do we have a good idea of the structure of those costs, yes. Some of that, of course, are people. We were quite a large asset manager when we have GEFI and MAG and such. So as those go out, the infrastructure that we have to support a large infrastructure manager, whether it be in legal or risk or compliance or human resources or the number of people is reducing. So there will be some people impact, but also real estate costs as we have smaller footprints around the world, things like that. There are a number of items that we have a very good handle on where we think we may be able to get the $74 million that's been identified.

Thank you. Moderator, a few more questions there.

Your next question comes from Matt Dunger from Bank of America.

If I could just firstly ask on the bank. Your guidance for 150 basis point NIM, how are you planning to manage that net interest margin given the planned growth in the bank seems to have compressed quite considerably in this half?

Yes. Thanks for that question. And you're right, the NIM has compressed I think across the market, and we've been pretty consistent with the with the market with, I think, about 8 basis points in the last quarter. I'm still very optimistic that we can grow that book, and we demonstrated that in the fourth quarter. But I mean I think you're right that we're likely to see a little more compression through the first quarter -- sorry, through the first quarter and second quarter of the year with that improving over the second half. I've also -- I mean, we've got to be really sticky. If it gets to a point where there isn't profitable growth, then we'll pull back. But I don't see that happening at this point. I just see compression earlier in the year and improvements later in the year, getting towards that $150 million through the year.

Great. And if I may just ask another question. On the capital, you flagged $250 million to $350 million pro forma on Slide 20. Could you just confirm -- you're talking about resources to support Private Markets post the merger as a 20% shareholder, what does that look like?

Do you want to talk about that?

Yes. So Matt, on the retained -- so that's the retained stake. Let me take you to -- the $250 million to $350 million will be the range that we will land as the allocation of part of the group's current capital surplus to PMCo. As at full year -- as at the end of December, I think the capital base that was allocated -- or the component of the AMP Group's surplus of $383 million was $227 million in AMP Capital. So we would expect that and a little bit more will go across. We haven't quite landed the exact parameter. In terms of go-forward capital requirements from AMP Limited's perspective of the retained stake, as Alexis sort of indicated earlier, and as I did, we would see it as sort of like it's a financial sort of resources and financial stability style instrument for AMP Limited. So we wouldn't expect there would be any further capital calls. And look, it's not they're seen as a strategic stake. It's they're really for balance sheet strength, and we wouldn't be a long-term holder. So we would envisage that it's a source of future potential proceeds rather than something that we continue to invest in if that was where you were going.

Moderator, is there more questions there?

Your next question comes from Scott Russell from UBS.

I've got a few questions about the bank, please. The Time to Yes goal was stable during last year, but it's targeted to fall by 30% this year. Can you just update us on how many days that's at as a baseline and where you think that is versus peers?

I think the time to conditional, yes, is sitting at about 5 days now. Actually, I think that's better than most peers. That's the feedback we're getting. But I think I'm not unrealistic that, that's going to continue to come down as all of the market invests in technologies and new customer service experiences, but that's where we are today.

And on the Time to Yes, presumably, that's quite a bit longer than the conditional?

That's correct. And it's sitting about where the market is in those teens.

Okay. So to what extent do you think by improving that is likely to assist brokers -- I mean, to what extent has that been a constraint versus the conditional approval side?

Well, I think -- look, if I look at our bank, the constraint has been the capacity before we got to sort of third, fourth quarter in '21. And so that's why we -- the improvement in the back-end process and the back-end system in the first half of 2021 was really important because the capacity has been our constraint with new business. The one thing I'm really proud of here is that, that time to conditional yes hasn't moved much. It's improved slightly, but it hasn't moved much. So we've managed to keep our record with the brokers pretty clean, which is very important in a book where 90% of your growth is coming from that broker space. I do think, though, that we have to continue to improve that. We know customers are expecting instantaneous results when it comes to home loans these days. And that's why it's a really big focus for us.

Yes. I mean the bank appears to be one of the highlights of the group in the last 6 months, and it does seem to be a potential source of customer acquisition going forward. I was just going to ask your thoughts about to what extent the bank can cross-sell customers into wealth. Historically, AMP hasn't done that all that well, cross-selling products between the bank and wealth to the extent that a lot of the new loans are being issued to new customers and bringing them into the group. Is that an opportunity going forward in terms of customer acquisition?

I absolutely see that as a longer-term opportunity for us, and that's why I really wanted to bring in a new CTO because I think this use of data and analytics to be able to better serve the customers is one of my big priorities. So I definitely see that as something we need to achieve over the kind of midterm, probably not something we're going to be focused on over the next 6 months, though. And I think we might take 1 last question, moderator, if there's one there.

Your final question comes from Andrei Stadnik from Morgan Stanley.

I wanted to ask 2. Firstly, sorry, again about the bank, but can I ask -- so the NIM in this last half, half-on-half fell by close to 20 basis points, which seems to be tougher than what most of the peers saw. So do you think the bank has been a little bit too competitive in order to gain traction? What's some of the things you could explore to help stabilize that?

Yes. I think that's a question, and I kind of mentioned over the last quarter our NIM has gone down about 8, and I have been reviewing all the other results of our competitive market, and it's about the same. So I think in recent days, given the double growth, we should be proud of that given it's been consistent. I think you're right, though, that we have to start to develop a better customer value proposition because you don't want to be only competing on price. Clearly price is really important. But we are thinking about how we want to do that now. You've heard me talk today about a direct-to-consumer mortgage, which we're very excited about. And I think something as a small bank we can absolutely pursue. So that's something I want to pursue. And we're really starting now to think about where is the market that's right for us. Our brand is definitely a middle-market Australia brand, so how do we target those customers more. And I think we've talked about in the longer term how do we actually offer customers in the wealth business the solutions we have available in the bank. But I think in terms of the compression of the NIM in the first half it might have been a bit higher, but I don't really see that happening in the last quarter. I see consistency with the rest of the market.

Yes. And Lex, I would add that we saw in the second half of the 18 basis points that you talk about, Andrei, that 8 of that was margin. So obviously the actual pricing, but 13 basis points was mix. So we were writing probably 60%, 70% of our volume at the fixed rate mortgages, and we've really wound that back. We're probably writing less than 10% of our new volume in fixed. So we've really strived to turn that off such that the pressure that was there through Q4 and will be there through Q1 has started to dissipate. And we've also probably started to prefund some of our changes in CLF requirements and those kind of things. So we are carrying a little bit higher funding costs. So there are probably a couple of things that have forced that second half down harder than 1 might have expected.

Yes. That makes sense. Got you. And then look, my other question, on the AMP Capital side, I'm struggling a little bit with the logic of -- while actually you got a pretty good pricings for Infrastructure Debt business. I'm struggling a little bit with the logic of selling that, but then -- and splitting it away from the infrastructure equity business, not just in terms of losing scale, but also just the crossover between the infra debt and infra equity. So can you expand a little bit behind the thinking there?

Yes. Thanks for giving us the opportunity to answer that. Shawn, do you want to talk about that?

Sure. First, in terms of client overlap, there's very, very little client overlap between the Infrastructure Debt business and the Infrastructure Equity business at all. There's some geographic footprint. Meaning they're in the same office space. But no, the businesses themselves, they did go through the same distribution channels, but the clients that buy those particular strategies were quite different. So there's not a lot of overlap at all in that regard.

Thank you very much. Listen, thank you, everyone, for listening into today. I very much look forward to speaking to you in the coming weeks, and appreciate your time.