HLI –25.57%: Big move today for the Mortgage Insurer after providing an update on their largest client, CBA, who last year put their existing contract with HLI up for tender, with a decision due in December this year. HLI was informed by CBA that as part of this process it has entered into exclusive negotiations with an alternative provider for the provision of LMI services to CBA – in other words, it’s highly likely they’ve lost the deal which accounted for 44% of Gross Written Premium (GWP) in FY24.
They’ll start to lose the CBA business progressively from FY26 onwards, which is obviously a big shift, however, there will be some offsets with capital likely to be returned to shareholders.
- While this is a surprise, it is the reason why we were reluctant to pull the trigger and buy HLI for the Income Portfolio. However, it is now an interesting proposition again, with likely capital returns on the horizon.
MM will retain HLI on the Hitlist for Income
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