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Stuart Irving: Good morning, and thanks for joining us for Computershare's 1H '26 Results Conference Call. As usual, Nick Oldfield, our CFO, is with me, along with Michael Brown from our IR team. We've released the presentation pack on our website, and I'll take you through the highlights on this call. Nick will then take you through the financials in more detail, then we'll open the lines for Q&A. And just to remind you, we will be talking in U.S. dollars constant currency and comparing to 1H FY '25 unless we state otherwise. Now there is a lot of detail on the results pack, but let me take you straight away to the key features of the result that matter on Slide 2. Business performance. EBIT ex MI, which really talks to the underlying business results was up 12%. And Nick will talk you through all the moving parts, but our BAU OpEx costs were contained below the rate of inflation. And excluding margin income, our margins expanded to 16%. And I think we're well on our way to the 20% EBIT ex MI margin target that we have called out. Now the margin income result, I thought was a standout. We knew that margin income was a headwind going into this year with the prospect of rate cuts, which actually came quicker than the curves predicted last August. And I know that U.S. cash rates have been a focus for many investors, and they did fall sharply in the half. U.S. cash rates were down over 17% compared to the PCP. However, Computershare's margin income was only down 5%. So there's clearly more to this than cash rates alone, and Computershare's natural hedge worked, and I'll explain that a bit later. Event and transactional revenues were also a highlight, up almost 13%. And we are seeing increased corporate action activity in some areas, although not firing on all cylinders across all regions yet. Employee share plan transaction volumes continue to grow, which is really a reflection of the continuing growth in the use of equity and remuneration and is really underpinned by increased issuance by companies. And finally, from a key points perspective, with a solid first half under our belts, stronger business performance and improved outlook for margin income, we are upgrading full year earnings guidance to $1.44 per share, and that's growth of 6% over the PCP. So these are the key points to start with, but let's move to Page 3, which is really a summary of the results. Management EPS was up 3.9%, and we have delivered earnings growth and consistently high returns in a lower interest rate environment. ROIC was over 36%, and our debt leverage reduced to 0.3x. And you may remember that future buybacks are tax inefficient for Computershare at the moment. So the Board has stepped up the interim dividend to the top half of the payout ratio range. AUD 0.55 per share is a 22% increase in the interim dividend, and Nick has kindly tipped in a few of his franking credits for this one as well. Now let's move to Slide 4. This new chart shows the long-term track record for each of our 3 key business lines and their 7-year CAGRs. The key point is that through organic growth and complementary acquisitions, all of our businesses have delivered solid revenue and EBIT growth over time. Now we've come a long way, and there are some impressive growth rates here. Employee share plans has delivered almost 10% revenue CAGR, underpinned by the issuance tailwind that we have spoken about. Issuer Services has been a consistent high-quality performer as we leverage our strength and build out complementary product lines. Corporate Trust has delivered the fastest EBIT growth over the period, including that step-up from the Wells Fargo acquisition. And we expect to continue to deliver long-term growth across all our businesses. We will continue to strengthen our competitive positions, widen our competitive moats and deploy new technologies to enhance customer value and, of course, efficiencies. Now just going into a little bit more detail on each of the business lines for the half. Issuer Services delivered the fastest rate of revenue growth across the group with contributions from all business lines. Registered maintenance revenues improved by over 4%, supported by new client wins across all our major markets. Corporate Actions revenues are recovering with revenue growth of over 12%. And while activity levels are still about 25% below peak 2021 levels, we have seen some strong improvement in some product lines since around November. IPOs in Hong Kong are a highlight. There's a sharp increase in completed deals, and we have increased our market share of new listings. But here is a good example of the flow-on effect in our business. In Hong Kong, we have seen north of a 400% increase in retail participation and applications for these IPOs. These applicants become shareholders. Now of course, we earn a corporate actions fee for the listing, but then we end up earning recurring fees for maintaining the register going forward. M&A volumes, on the other hand, are yet to fully recover, as I mentioned earlier on. The number of completed deals was down across all markets apart from Australia. But based on the deal pipelines, the outlook is a little bit more positive, but it is hard to predict which half year period it will actually land in. Elsewhere in Issuer Services, in January '25, we completed 2 small investor-related acquisitions, which were not in the PCP. Now these businesses are small and the margins are lower as we build out scale and capability. We also touched on tokenization within Issuer Services at our AGM. Since then, we have continued to actively engage with regulators and market participants to help shape the structure of digital markets, and we see this as a long-term positive for us. Computershare has always, at its heart, been a technology company whose key role is to support and advise issuers. We have applied our deep understanding of the rationale and benefits of existing market structures to design a tokenization model, which we call issuer-sponsored tokens or ISTs. We have been engaging with the digital task force at the SEC on this proposal. And I think it's really encouraging to see that our pro-issuer stance is being reflected in the latest communications from the task force, and we really see that as an opportunity going forward. I mean, our goal is really to replicate the trust, compliance and protections of traditional registered ownership while enabling the benefits of digital transferability, interoperability and, of course, approaching 24/7 accessibility. Now moving to Corporate Trust. The business is performing well. Fee revenue up over 12%. We are benefiting from increased issuance volumes across most product categories with strong volume growth in key structured products, RMBS, ABS and CMBS. As expected, higher activity levels are generating higher client balances, and we continue to strengthen our platform and capabilities as we patiently pursue acquisition targets. Employee share plans delivered another set of strong results. Revenues increased by 5%. Client wins across all markets drove higher fee revenues and transactional revenues grew. The plans book continues to grow with the increasing use of equity and employee remuneration. In Europe, for example, issuance of units increased by over 20%. Recognizing the business has an element of sensitivity to equity markets, I do think we've built an impressive portfolio of multinational clients across diversified industry sectors. And it's really the size of that book that fuels the growth, and we see the number of units being administered increasing over time. Now let's move to Slide 5, where we talk a little bit about Computershare's natural interest rate hedge. I do think that it's a very important part of Computershare's model. But it allows us to really unwrap why margin income is so resilient at down 5% when the U.S. cash rates for the period was down some 17%. And there are really several parts to this hedge. First of all, and we've been saying this for a while, lower rates stimulate more activity across our business lines. And as you will see, client balances are up and higher balances can mitigate lower yields. And as a reminder, only about 1/3 of our balances are fully exposed to short-term rate movements. And there's also another part to this hedge with lower interest costs on group debt. Now there are 2 drivers there, lower interest costs and reduced debt. All our debt is deliberately at floating rates. So we are also benefiting from the lower rates to the tune of some $14 million. Therefore, including interest rate savings, the net impact on lower rates of Computershare overall in the first half was only $8 million. That's only about 1.5% of PBT. So when we combine higher balances, the benefit of our hedge book and lower interest rate costs on a strengthening balance sheet, you can see that looking at lower cash rates alone sometimes misses the bigger picture. Let me now turn to the outlook on Page 8. In August, we provided initial guidance for management EPS for FY '26 to be up by around 4% to $1.40 per share. This assumed a full year profit contribution from U.K. Mortgage Services, which we successfully divested and closed last week. Even without this additional contribution for the last 5 months of the year, we now expect to deliver management EPS of around $1.44 per share, up 6%. We do have momentum across our key business lines, lower interest costs and of course, the benefit of the share buyback we completed last year. But we will maintain our focus on executing our strategic plans to deliver higher quality Computershare that generates consistent results and enduring returns for shareholders. Nick, now over to you to go through some of the numbers in more detail.
Nick Oldfield: Thank you, Stuart, and good morning, everyone. So as you've heard, we delivered $0.679 per share of management EPS in the first half of FY '26. Now there's been some noise on costs overnight, so I want to start by clearing this up. First of all, BAU OpEx was up 2.6%. We have said consistently, our objective is to manage BAU OpEx at or below inflation. This result is firmly in that target range. So what was the noise? Well, we calculate BAU OpEx as general cost increases less the cost-out benefits delivered around the group. Total cost-out benefits totaled $16.5 million. This was $6.2 million in operating synergies from Corporate Trust, whilst our ongoing Stage 5 cost-out program delivered $10.3 million in savings. The next component of cost is investment spend. This is really about the next stage of growth at Computershare. This added $25.7 million of cost. It includes $5 million for 6 months of new ownership of Ingage, CMi2i and BNY Corporate Trust Canada. The remainder was investment in both technology and people to support ongoing product innovation and revenue growth, particularly in Issuer Services, investments to establish our corporate trust capabilities in Europe and the launch of a social value fund in our U.K. deposit protection service. This does, of course, cut both ways. In the second half FY '26, you will see the benefit of lower cost from the divestment of U.K. mortgage services. Around 800 people have left the business as a result of that transaction. The third point is a slight delay in the benefits arising from our Stage 5 program. Estimated savings for FY '26 have been reduced by about $6 million. $3.3 million of this reflects a slight delay in the timing of benefits. The other $3 million is simply the fact that we sold the U.K. mortgage services at the end of January before the savings could flow through. More details on the cost-out programs are included on Slide 38. And today, we announced that these cost-out benefits will also extend to FY '27. We now expect pretax cost savings from Stage 5 and corporate trust programs of $23.2 million in FY '27 and the EBIT ex MI margin will be higher again. I'd now like to touch on stranded cost. As you may recall, in August, I said that there was $40 million of stranded clark costs included in the FY '25 cost base in the Technology Services and Operations segment and that these were to be reallocated out to the business lines in FY '26. In 1H FY '26, around $19 million has been allocated, and the remainder will be allocated in the second half of FY '26. To be clear, these costs existed in FY '25 and they exist today. They're not an increase. They are stranded simply as they represent costs we have to pay to support the business, and we've just reallocated them out to the divisions. To manage overall costs, therefore, we focus on cost savings elsewhere. And so the $16.5 million of cost out I mentioned earlier offsets these stranded costs almost one for one. Below-the-line costs were also lower. I said in August, they'd be 40% lower in FY '26, higher than FY '27 and disappear by FY '28. I now expect them to be 30% lower in FY '26. This is what we achieved in the first half and second half of FY '26 will be similarly reduced. Not quite the 40% I expected, but this is largely due to timing of some redundancy expense in the second half. I expect a 55% reduction in FY '27 and still elimination by the first half of FY '28. To reiterate, FY '27 will be the last year of these below-the-line costs. This is all shown on Slide 12. So let me now touch on MI and guidance before we move to questions. In FY '26, we expect to generate around $730 million in MI, an upgrade of $10 million compared with the expectation of $720 million back in August. You can see this on Slide 9. This is based on average balances of $30.8 billion, in line with exit balances at the end of December. We expect a yield of 2.37% based on the assumption of one rate cut in the U.S. in March and one rate cut in the U.K. in May. This is based on curves as at the 9th of February. Moving forward, I expect MI to continue to be resilient. The hedged yield should increase further to over 3.5% in FY '27. And as we've demonstrated in 1H '26, if rates do fall further and each 50 basis points in global rates is worth around $48 million in margin income, any negative impact can be materially constrained by growth in balances, lower cost of debt and increases in hedged yields. Turning to guidance. Slide 13 shows the second half bridge. Relative to 2H FY '25, there's $0.03 per share of organic business growth and cost out. This continues the momentum of the first half. Yes, EBIT ex MI growth in absolute terms is a bit lower, but that's because the second half is always bigger and because we're dealing with the sale of U.K. mortgage services. That would have contributed $0.01 per share in the second half had we not sold it, around 2% of EBIT ex MI. Margin income is down $0.02 per share versus the PCP. Interest expense is down $0.04 per share. This is the natural hedging action powered by a full 6 months of benefit of paying off the USPP in November 2025. Tax is broadly neutral, and there's $0.01 per share of buyback accretion. We expect this to deliver us $0.76 per share of earnings in 2H FY '26. This would be a record half for Computershare. I'll now hand back to Stuart.
Stuart Irving: Thank you, Nick. I think we are really looking forward to some of the questions. So why don't we move straight to that.
Operator: [Operator Instructions] The first question comes from Kieren Chidgey with UBS.
Kieren Chidgey: I might start with a sort of follow-up question on costs. Thanks for the additional detail you provided, Nick. I just wanted to circle back on some of your comments. So the investment number you called out in first half '26, I think, around $25 million, you're saying $5 million was acquisition-related, $20-odd sort of tech investment in the business. I'm just wondering if you can sort of talk to that tech investment around how one-off you kind of see that or whether or not truly it is sort of ongoing investments you need to make more broadly on a go-forward basis? And also around sort of the additional benefit you flagged in '27, which I think you said $23 million, whether or not sort of that's the full scope of, I guess, what you see left post Stage 5 of your cost programs and whether or not we should think about or be prepared for any stranded costs out of your U.K. mortgage services sale as well?
Nick Oldfield: Okay. Thanks, Kieren. So let's try and -- I think there's probably 3 questions in there. So the first one, the $20 million of non-M&A investment in the first half, yes, look, a large part of that is really one-off. So it's a one-off sort of step-up. I don't anticipate it being a recurring $20 million. There will be a little bit -- there will be a similar investment perhaps in the second half, but it will level out. And then you shouldn't see that recur going through to FY '27. The second piece was...
Kieren Chidgey: Just around the '27 sort of cost...
Nick Oldfield: Yes. So the $23.2 million of cost savings in '27, that should be the -- it's largely the end of the -- by the end of '27, we'll have delivered the programs. So they will all be finished, but there will probably be a little bit of flow-through of benefits into FY '28, partly because of the timing of when that $23.2 million will hit in FY '27. So if you think about our EBIT ex MI margin, I'd anticipate it being sort of 19-ish percent in FY '27 and 20% in '28, if that makes sense.
Kieren Chidgey: And Nick, is there any sort of -- is that a gross or a net number? Is there sort of any stranded costs out of the...
Nick Oldfield: Sorry, and the stranded costs on U.K. mortgage services. There is a small amount of stranded costs. But we have -- and that's really the cost of supporting the TSA over the next 12 months. We anticipate that through the course of the 12 months, as we wind down the TSA, we'll be able to eliminate that cost. So we're not anticipating a legacy sort of stranded cost issue in the business. We anticipate...
Stuart Irving: Definitely it's different from U.S. mortgage services because the U.K. business, as you'll be aware, was up for sale for a long time. So that has actually given us time to strip out some of these traditional stranded costs and have it pretty much run along as a sort of separate entity, so to speak. So the stranded cost issue in U.K. mortgage services is a very different picture.
Kieren Chidgey: Okay. My second question was broadly around tokenized equities. Obviously, it's a big subject matter, so I don't expect to unpack it in full today. But Stuart, I guess the question was more going to if you do see an opportunity here, what additional investment you need to make across the organization, either organic or inorganic to get the tech blockchain solutions that you might require? How you're thinking about sort of that investment slate -- and sort of at the same time, I guess you've still got the interest in building corporate trust through inorganic growth if that pipeline does open up. So how are you sort of lining up those 2 opportunities?
Stuart Irving: Yes. So if we start about sort of tokenization of digitized securities, et cetera. And I think that in the U.S., where really the discussion on tokenization is the most advanced, I think that the regulator is all about been ensuring the same level of investor protections and transparency for tokens and view them as very much regulated securities. And issuers will still require a regulated third party or a transfer agent to really sort of maintain what we call the master security file and administer corporate actions and force transfer restrictions, et cetera. So we have been speaking with a number of market participants and regulators and also third parties about how we could structure it. We proposed something called an issuer-sponsored token, which is really designed to replicate that trust compliance and protections. And you would have seen perhaps some of the disclosures by the regulator that they fully expect that an IST model can work, but it will work alongside the current business that we have just now. So what does that mean? Well, it just means that we have to integrate into whatever distributed ledger or blockchain-type technology there is. As you would have seen, you've got NASDAQ thinking about doing something. You've got NYSE thinking about doing something. You've got DTCC thinking about doing something. You've got other third parties. Now they're all talking about doing things which are nothing to do with the transfer agency component, right? That's got to be very, very clear, especially because of the model in the U.S. all the brokerage positions, custodian positions, et cetera, they're all held at DTCC anyway, right? We never see them, right? We just have one account that covers their position. We look after registered sort of mom-and-pop type shareholders. So -- but we would need to integrate. Now part of that is just APIs into whatever technology solution may well be part of that. It may well mean that we'll either develop, acquire or partner to do certain blockchain components of that. I think my view is this is going to take a long time to play out. I do not see it as a negative. In fact, the independence of the transfer position or a transfer agent is still being maintained at Computershare. And whatever technology comes, we'll integrate it, we'll own it, et cetera. I don't think it's going to be a huge cost element into Computershare. But what we want to do is we just want to make sure that issuers are protected and issuers are in charge of doing their own token. And look, we're not seeing a lot of demand for it at all apart from a couple of noisy companies whose business is around crypto. But just rest assured, Computershare is at the forefront of it. But it is a big topic, and I look forward to sort of further dialogue over the coming days on it.
Operator: The next question comes from Nigel Pittaway with Citi.
Nigel Pittaway: I was just wondering, first of all, if it's possible to get a bit of divisional color about this sort of EBIT ex MI margin improvement that you're targeting and flagging. Obviously, previously, you had a target for CCT to reach a 20% margin. So is that incorporated in that sort of guidance? And how should we think about it sort of happening across the various divisions?
Stuart Irving: Yes. So what we've said is EBIT ex MI, we have a target of around about 20% margins. That's really what we are targeting from a growth perspective. Now in CCT, which is our Corporate Trust business, as you'll remember, Nigel, quite often, there's the fee structure there means it's a lot -- it used to be a lot of margin income and less fees. And we're gradually sort of changing some of that sort of model into sort of more fee income, which helps improve the EBIT ex MI line. But I think it's really going to be a contributor from all the divisions. Issuer is more of the mature business, and it's got some, shall we say, sort of start-up early growth businesses in it around investor engagement and other bits and pieces, which compresses a little bit of the margins on that front. But if you look at the EBIT ex MI performance over the last few years, we have been making step changes and improvements as we head towards that target. So I think it will be, as I said, across more of the business lines, CCT plans and Issuer probably in that order.
Nigel Pittaway: Okay. And I mean, is there any reason why plans margins have been relatively static given you've sort of had quite a lot of transactional improvement there? I mean is that just some investment going in, in the first half or...
Stuart Irving: Yes. Yes. I mean FY sort of '26 is really the first year where the major platform integration components of that business have been completed. So it's kind of -- it's got over the large-scale global complex technology integrations and migrations, et cetera, sort of running through. I think that it's a pretty good margin business as it stands. I think that whenever we talk about EBIT ex MI margin businesses, I think the future capability for Computershare to use new technology that's getting deployed, and I'm not going to jump on an AI bandwagon here, but the ability to reduce some of our back-office reconciliation costs in these highly regulated business, et cetera, will lead to sort of future margin expansion because the cost to run some of these businesses there. Of course, the trick is not to sort of have that competed away these benefits, and we'll work hard on that. But I think with -- now that the bulk of that tech integration is over, we can then sort of focus on more efficiencies and deploying some of these new technologies over the next few years that are coming through, which should help us expand the margins.
Nigel Pittaway: And then maybe just quickly on the footnote to Slide 38, this initial FY '27 target of $46.1 million growth. Just to be clear, is that the cost-out target? And how does that relate to -- I think it was -- did you say 23.2 earlier?
Nick Oldfield: The $46.1 million is the cost to achieve, Nigel.
Nigel Pittaway: Right. Okay. Yes. So it's below the line.
Nick Oldfield: So it ties to the -- it should tie to the chart on Slide 12.
Nigel Pittaway: Yes. Okay. Fair enough. And then finally, could you just maybe give us sort of some idea of the assumptions over the key drivers that are in guidance, so things such as what you're sort of allowing for corporate actions, corporate debt, share plans volumes, et cetera?
Stuart Irving: Yes. No, absolutely. I think that's important. I mean, on the corporate actions front, as I mentioned earlier, the first sort of 4 or 5 months, generally was pretty flat year-on-year, notwithstanding Hong Kong IPO. But what we have seen certainly is a momentum coming through late November, December and into January on corporate actions. I mean, M&A volume, for example, was down across all regions in this half with the exception of Australia, but we see that now picking up. There's always a lag between announced and completed M&A, of course. So we think at this sort of early stage of the second half with a bit of momentum, we should see improved corporate actions performance. Employee share plans, I know that there's certainly a view that it's tied to where equity markets are going to be. But I think the fundamental is the number of units and the size of that book is really going to be the driver of that sort of trading revenues. The AUA on that book sort of increased 25% in 1H '26 versus 1H '25. The number of units are up some 20% in some regions, so -- and the big regions. So that will continue to be sort of a driver so fairly consistent sort of coming through from a performance perspective. And then we touched on -- I mean, corporate trust debt issuance has been picking up and recovering. So all 3 of the businesses have some elements of momentum in them to the second half. That will offset, obviously, sort of lower margin income, but then we get the benefit of the lower debt costs as well. So that's really how we see that sort of flowing through at this early stage of the second half.
Operator: The next question comes from Andrew Buncombe with Macquarie.
Andrew Buncombe: Just 3 relatively simple ones, please. The first one, I think the buyback thesis is well understood now. So you've obviously increased your dividend payout ratio this half. How should we think about the dividend payout ratio in second half '26 and then again into FY '27, please?
Stuart Irving: Look, I think we've tipped into sort of the higher point of our range. Sort of I think the payout ratio is like 52% or whatever. We've got a little bit room to go there. It's good to see that step up just in terms of returns for shareholders. Even with this step-up, net debt should continue to actually drop. I think that's a really important factor there. So there's headroom there. And there's always a balance in terms of what to do. I mean, obviously, I mean, personally, I'm a little bit frustrated about the whole buyback situation as well. I think that's a generally pretty good mechanism in terms of returns for shareholders. But once we flow through to the second half, the Board will look at that sort of payout ratio and probably look at that in the sort of low to mid-50s range. That's what you would probably expect to see. And then as for '27, that will depend on what other capital we may deploy elsewhere, et cetera. So hard to give you a full prediction on that.
Andrew Buncombe: Yes, that's fair. The second one was just in relation to the 20% target for EBIT ex MI margins. Can you just remind us when you were targeting to actually achieve that at a group level?
Nick Oldfield: Yes. Well, when we first thought it would sort of take us 2 to 3 years to get there, Andrew. And I think that's still sort of relevant. So it's going to be sort of FY '28.
Andrew Buncombe: Yes. And then the final one was just on the tax rate. You're at the lower end of the full year guide in the first half on a management accounting basis. Is there anything unusual that's going to cause that number to step up in the second half? Or should we assume that, that effective tax rate guidance for FY '26 is pretty conservative?
Nick Oldfield: Look, I think it's reasonable. I wouldn't say it was necessarily conservative. Based on how we're seeing the business, how we're seeing the first half, I think the guidance is reasonably accurate. There's nothing out there that I think that could materially change things.
Operator: The next question comes from Siddharth Parameswaran with JPMorgan.
Siddharth Parameswaran: A couple of questions, if I can, please. First is just on just the transactional revenues. And maybe if you could just make some comments on where you think we are in the cycle on Issuer Services and also share plans? And also just how -- what you're assuming when you target this 20% EBIT ex MI margin target in FY '28, just whether you're expecting those transactional-related revenues to normalize lower or continue at these levels?
Stuart Irving: Yes. So if you look at the transactional elements across the different business lines, so you start off with Issuer Services. The transactional sort of fees within that really are corporate actions and a little bit of SRM and shareholder paid fees. In terms of where we're at the cycle, as I mentioned before, corporate actions are, I would say, below cycle. They are improving, as I said, but I think there's more to go there. There's always a bit of a lag between that component. The SRM component, which is stakeholder relationship management, that's kind of big large proxy jobs. It's a little bit harder to predict where we are. It's not really a cyclical component on that perspective. As far as plans are concerned, you'd say that the transactional revenues would be above market cycle if the book was the same size as what it was 2 years ago. But the thing is the book is considerably larger, the number of units being issued that are larger. So I would not say that we're at the top of the cycle with there. I mean, clearly, there's equity markets in most sectors are sort of doing okay. But it's a larger size of the book that will actually continue to drive that. So we're pretty optimistic on sort of maintaining and, in fact, growing some of that. And it's also a very diversified book. We're not -- it's not just all tech stocks or all health stocks or all resource stocks. It's very diverse, both from a sector perspective, geography perspective. So I think I wouldn't say that we're at a high from a sort of cyclical perspective there. And then finally, although it's technically not a transactional issue, but just to go on to the theme of the cycles, I think that debt issuance is recovering. We were below cycle on a number of these structured products, and you can see that sort of increasing. And part of what we did in one of the earlier slides in terms of showing that sort of 7-year track record is through these cycles, right, on the track record and the CAGR growth. But anyway, so a little bit of a mixed bag sit there, but that's my perspective at the moment.
Siddharth Parameswaran: And sorry, just for the FY '28 targets, just what you're assuming versus where we are today?
Stuart Irving: I'm not assuming any significant change to these transactional volumes to be able to meet targets for '28.
Siddharth Parameswaran: Yes, similar point in the cycle is your assumption. Yes. Got it. Okay. Just one other question then just around the margin income side. So you've pushed your banks hard again. It seems like for the last while, we've had the hedged yield continue to surprise on the upside. The recapture rate has now improved on the non-hedged side. Just wondering if you could comment on whether you feel that this is the new steady state, whether there's more you can do in terms of either lengthening tenure, extracting more yield on the hedge book. And also on the recapture rate, whether that's the 95% odd that we're at now is the go-forward level, whether there's more you can do there?
Nick Oldfield: Yes. So look, Sid, in terms of the recapture rate, 95% is probably as good as it's going to get. There is a -- we get a better -- a lot of it will come down to the geographic mix. And so we get a better recapture rate in the U.S. versus, say, Canada and the U.K. And so if we saw more swing towards the U.S. versus the U.K. and Canada, then we might see the recapture rate increase further again. But I think that in reality, it's not -- I don't anticipate the U.S. becoming more heavier in the sort of -- in the portfolio than it is currently. In terms of the hedge rate, that's really going to trend broadly in line with the 5-year swap rate. That's about 3.5% at the moment. I don't think -- because of the nature of the book, it's going to tip over sort of 3.5% in FY '27. I think it perhaps peaks around 3.6% given where the current swap rate is. And then it will sort of stabilize in that sort of 3.4% to 3.6% range for the next 4 to 5 years. The weighted average life of the book is -- was 5 years at the end of December. It's tipped up a little bit in January because of some trades that we've done. But we target a weighted average life between 5 and 6 years. So we're not really looking to put any more tenure in at this point.
Operator: The next question comes from Ed Henning with CLSA.
Ed Henning: Just the first one, can you highlight where you've seen and where you can see in the future average fee increases either by rolling out additional products and seeing some more uptake there or increasing pricing to improve margins going forward?
Stuart Irving: Yes. So look, I think improving margins is going to be about fees and then also about cost to serve. We are in a competitive marketplace. But I think if you look at Issuer Services, for example, some of the things that we're trying to build out that sort of one-stop shop around entity management and Investor Relations beneficial shareholders and then shareholder advisory, putting that all together, which will be quite a unique offering into the marketplace and drive sort of the fee structures from that more sort of digitization of some of the interactions will lower the cost to serve, et cetera. So the margin expansion is going to come from clearly sort of the top line fee elements where we can and also back-office efficiencies. So we look at that across the board. And we track the average fees per client, the average fees per either shareholder or employee, the per deal fee, all that type of stuff. We track it quite heavily and continue to try and sort of push the boundaries on that, notwithstanding the competitive markets we're in.
Ed Henning: And then just the second one, maybe just touch on the balance sheet and acquisitions. Look, I understand you've talked about being patient. But can you just run through at the moment, what are the hurdles to deploy capital? Is it just the price for assets? Is rates falling in the U.S. helping at all? And are there any areas that are looking more promising at the moment or just still kind of scratching around?
Stuart Irving: Yes. Look, it's a good point, Ed. I think one of the things, if you look at from a Corp Trust perspective, it's really about making sure that we've got the appropriate regulatory approvals to put us in the best possible position to actually pursue these acquisitions. So that takes some time to go through that. We've got our applications in for various jurisdictions around the world, and that really makes us a strong counterparty. So you've got to be patient for that. But it is ironic that sometimes when there is -- if there's a market correction and prices are lower, they are the best times to buy businesses. And I think I look at lots of other businesses around the world. I look at Computershare in history as well. And I've seen that sort of pressure come down and go out and buy at high price. That's how you're going to destroy shareholder value. So patience is key here. And we remain committed to the disciplined framework for M&A. And that really is where we will get the confidence to drive long-term shareholder value on that patience. But a number of things come across. Prices are still high for certain types of assets. And so again, patience. That's the key.
Ed Henning: No, that's great. And just to clarify on the approvals that you're seeking, is there any time lines for the European and stuff approvals to come through. Or is it a bit uncertain?
Stuart Irving: Look, I think that we have a main EU application in, which has been done through the Netherlands and also our applications in with the FCA in the U.K. They generally take 6 to 12 months to go through that process. So look, I would be a little bit disappointed/frustrated if that's not there by the end of this calendar year.
Operator: The next question comes from Julian Braganza with Goldman Sachs.
Julian Braganza: Just the first one. In terms of the cost-out programs coming to an end, just more broadly, how are you thinking about medium-term BAU cost growth? And also just secondly, any thoughts on implications and further cost-out benefits that could come through from embedding AI within the organization?
Stuart Irving: Yes. So look, I mean, just on the cost-out programs, these were sort of large-scale announced trackable product projects. And it doesn't mean that they come to an end. We're not going to be doing anything, I can assure you, right? But just in terms of how we'll structure it internally, it will be a bit different. And I do think that implementation of new technologies will help us reduce costs. There's no doubt about it. I mean you mentioned AI. It's certainly a technology that will provide various degrees of efficiencies across the group. Like lots of companies are sort of talking about it. We have projects in place. The length of time it takes developers to build something in an AI model is coming down, and that means that your time to market new products gets there or you require sort of less sort of on the tech side. You've got the other products and tools that you can put in, which will also drive that. So at the moment, there is some certainly challenges in terms of getting a return on your investment on some of that big AI stuff. Some of the tech costs that we are is us investigating these. We have multiple projects vying for attention, and it's sort of my job and Nick's job to sort of assess these from an investment perspective. And these are both revenue-generating and cost reduction opportunities. But we're not sort of flying the flag, but I certainly think these technologies will allow us to improve margins going forward as well. So yes, we'll certainly be a deployer of these techs.
Julian Braganza: Okay. Great. And then secondly, it looks like part of the cost saves are also coming through in the form of revenue synergies. Can you maybe just talk a little bit about that. And also just any revenue synergies that should come through in FY '27 and which divisions that's being floated up into?
Nick Oldfield: Yes. The revenue synergies, Julian, you'll see on sort of Slide 38 that we called out that some of the benefits from the CCT or the Corporate Trust program are coming through in the form of revenue synergies. That's really in new product offerings that we've been able to kind of develop through the synergy and integration program that we've been running. And so when we called out $80 million of overall program benefits from that acquisition that we included in that $80 million target some revenue synergies and benefits. And you can see in FY '26 first half is about $5 million or so of revenue benefits, and you probably sort of see something similar in the second half.
Julian Braganza: Got it. And then lastly, just in terms of margin income and specifically balances, can you maybe just talk to medium-term upside to balances? I know previously, you were flagging about $3 billion to $5 billion over the next couple of years. Is that still your view given where we're at? We're starting to see green shoots of recovery in corporate activity? Is the improvement in balances matching up to expectations. Or is there a bit more runway relative to that previous guidance that you given the market?
Nick Oldfield: Yes. Look, I mean, I think if you look over the last 3 or 4 halves, you'll have seen that balance has steadily inched up every single half as rates have dropped down. So there's certainly a bit of a trend there. If you go back and look over history, then you only have to go back to sort of FY '21, and you'll see that overall balances were about $3 billion to $4 billion higher than they are today. So certainly, we are at least 10% off the peak. I think as Stuart already talked about earlier, corporate actions volumes were pretty subdued really from our perspective in the first half. And so both a pickup in corporate actions activity and ongoing growth recovery in debt issuance should drive those balances higher over the medium term.
Operator: The next question comes from Andrei Stadnik with Morgan Stanley.
Andrei Stadnik: Can I ask my first question around the Corporate Trust? So you noted stronger mandates, particularly in the higher-margin structured products in the half. How do you view that unfolding over the rest of the year?
Stuart Irving: Look, I think that there's definitely been sort of momentum across these ones here. Just in terms of the market, RMBS issuance up 35% commercial mortgage-backed security, up 5% in the market, so probably a little bit more room there. CLO issuance up 10%, asset-backed securities up over 35%. So there has been some pretty good U.S. debt issuance volume come back. So -- but that was recovery, right, because it came to -- it dropped for a while. So there's nothing that I can see in the short term that won't sort of change that in terms of as we move through into the second half. I mean there's still a lot of sort of debt being issued. And it's always part of the underlying sort of structural growth of our Corporate Trust businesses. There's no doubt about it that it's elevated, but it's elevated because it's doing catch-up. So I think that it should continue through to the second half.
Andrei Stadnik: Including that favorable mix to structured products?
Stuart Irving: Yes, I think so, yes.
Andrei Stadnik: And look, my second question, just one slide earlier on Issuer Services on Slide 20. You showed some very strong Registered Agent units under administration growth about 10%. Can you talk a little bit about what's driving that? And then maybe also just what are the differences for the trends in direct versus partnerships?
Stuart Irving: Yes. So Registered Agent business, I mean, it's fundamentally the registering legal entities across all the various states in the U.S. And some of that customers do directly through us. Some of them do it through large-scale accountancy firms, et cetera, where we have relationships with, which is kind of like an indirect. So look, it continues to grow in terms of number of entities. I mean in the background on that business, we've been building out new technology capability because it is a lower-margin business than core registry. And we're working on the integration of that -- some of these systems -- newer systems to lower the cost to serve. And our real focus there, not only is just growing entities, it's really actually improving the margins in that business and scaling it. So it has a track record of continuing to grow, but it's got somewhere to go there. And I also think there's some inorganic opportunities that will come down the road on that particular business as well that will help us with some of that scale. But that's really sort of entity management.
Operator: I'll now hand the call back over to Mr. Irving for any closing remarks.
Stuart Irving: Yes. Well, listen, thanks so much for joining us. I think in summary, good start to the year. Businesses have momentum into the second half, and it is encouraging to see some of the recovery in some of that more market-sensitive activities. But I do think there's more to go. We did give a modest upgrade to the full year guidance and a nice step-up in the dividend for our shareholders. But I think importantly for me, the operating businesses are performing consistently and predictably, which really gives me that confidence for the full year and beyond. We talked about the pursuit of attractive acquisitions. As I mentioned, answering the question, patience is key. We remain committed to our sort of frameworks and confidence we'll be able to drive long-term shareholder value with these in the future. But I can assure you that in the meantime, we're going to focus on driving organic earnings growth and consistent high returns regardless of the interest rate market. But anyway, thanks so much for joining the call, and I really look forward to meeting with many of you over the coming days.