Good day, and thank you for standing by, and welcome to the Jedworth Mortgage Insurance Australia's First Half twenty twenty one Earnings Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Mr. Paul O'Sullivan, Head of Investor Relations for Genworth Mortgage Insurance Australia.
Thank you.
Please go ahead.
Hello, and welcome to the first half twenty twenty one financial results briefing for Genworth Mortgage Insurance I am Paul O'Sullivan, Head of Investor Relations. This morning, we will start with a presentation from our CEO, Pauline Blight Johnston, We'll provide an overview of the results. Our CFO, Michael Bensick, will go into more detail on the financials, And Pauline will then wrap up with a summary. After the presentations, we will open up for questions from investors and analysts. I'll now hand over to Pauline.
Thanks, Paul, and good morning, everyone. Good to be here with you as we report a strong first Half 2021 results with a return to profit, ongoing top line volume growth and a resumption of dividends. Over the half, the business benefited from the improved economy, housing market appreciation and low interest rates. Our strong performance is also underpinned by the operational and reserving initiatives we implemented last year that are enabling us to respond more efficiently and strategically for the evolving needs of our lender customers and their borrowers. The increasing challenge of housing affordability in Australia Through our traditional LMI product as well as a strategic focus on evolving this offering to better meet the desires of today's homebuyers, The company is well positioned to help meet this demand and benefit from the continued strength in the housing market.
Of course, the latest lockdowns will have some impact on the economy over the coming months. We have been pleased to see the resilience of the economy and its ability to recover from prior lock down due to its strong underlying momentum and hope this pattern will continue as the states move through their reopening phases over the coming months. So now let's turn to Slide 5 to go through the results. On Slide 5. For the first half of twenty twenty one, Genworth delivered an improved underwriting result of $88,000,000,000 Underlying net profit after tax was $76,000,000 with statutory net profit after tax of $59,000,000 which includes the impact of unrealized mark to market investment losses from a rise in government bond rates.
Over the half, we achieved ongoing top line volume growth underpinned by strong housing market performance and above system growth from our lender customers. New insurance written during the first half of twenty twenty one increased 14.7 percent to $15,500,000,000 compared to the same period in 2020. Gross written premium increased 21.1 percent to $290,000,000 And net earnings per annum increased 13.3 percent to $171,000,000 This strong new business flow will underpin growth for the company over the coming years. During the first half, reported delinquencies and paid plans remained subdued as a result of strong dwelling pipe appreciation and the government and lender support programs that were in place to assist borrowers up until March 2021. Of course, it remains to be seen how the latest lockdowns will affect the ongoing economic recovery and hence Genworth's claims experience over the coming periods.
We welcome the new borrower support programs introduced by vendors, noting that they will further Then the duration of the subdued delinquency for that behavior that we've been experiencing. We believe these programs are ultimately positive for our planned experience. However, they will extend the time frame over which we will obtain clarity on the ultimate planned outcome. Importantly, the company remains in a strong operational and financial position. We are well placed to withstand a wide range of future phase outcomes and have the capacity to respond to changing circumstances and opportunities.
As of the 30th June 2021, Gemalitt's PPA coverage ratio on a Level 2 basis was 1.74x, which was above the top end of the Board's target range of 1.32x to 1.44x, representing surplus capital of $320,000,000 above the top of the range. This strong capital position and the improvement in our earnings have led to the Board's To be clear, an unfranked interim ordinary dividend of $0.05 per share. I'll touch briefly on the economy now on slide 6. Economic conditions continue to improve through the first half with a low interest rate environment providing ongoing stimulus to housing markets and unemployment improving to pre COVID-nineteen levels supported by significant fiscal and monetary support. As of June 2021, national dwelling values were 12.4% above the previous peak of April 2020 and the unemployment rate was 4.9%.
Improved GDP results have been reported in the most recent data published to the 31st March 2021, And housing savings have significantly increased over the same period. These trends are all positive for our business. Against this, the recent COVID-nineteen outbreak and the reemergence of lockdowns demonstrates that the speed and shape of the economic recovery is far from certain. It largely depends on the effective management of health outcomes across the nation, including the speed of the vaccine rollout. We are, however, encouraged that the Australian economy has shown extraordinary resilience since the onset of the pandemic and has demonstrated an ability to recover from the short term shocks created by lockdown.
I'll turn now to Slide 7 to talk about Genworth's plans experienced to date. You'll recall that the initial government support and lender repayment deferrals ended in March 2021. The vast majority of loans that were on those repayment deferrals prior to March have resumed repayment, and we're working closely with lender To date, we've seen lower than usual levels of reported delinquency. This, accompanied by the ongoing moratoriums on owner occupied foreclosures as well as strong economic recovery, have resulted in lower than usual paid claims, as you can see in the chart on the left hand side. We compensated for these impacts for the $23,000,000 incurred or not reported reserve increase in the Q1 of 2021.
In the Q2 of this year, we reviewed the earnings curve to incorporate the more favorable loss experience and improved economic outlook. Based on the advice of Genworth's appointed actuary, the earnings curve has been adjusted to improve the alignment of premium recognition with net claims incurred by lengthening the average duration of revenue recognition. You can see this in the chart on the right hand side. The earnings curve adjustment is effective for the 1st April 2021 and resulted in a reduction in first half twenty twenty one net earned premium of $12,000,000 Turning now to Slide 8, where I'll talk about our strong capital position and capital management. As at the June 13, 2021, Genworth's PCA coverage ratio was 1.74x on a Level 2 basis.
This was above the top end of the Board's target range of 1.32 to 1.44x and represented Surface capital of $320,000,000 above the top end of the range. The chart on the left provides a TCO ratio walk showing the key movements in our capital position over the half. You can see that the capital required to support the ongoing new business growth is Last events in the capital has been released on the back book. This demonstrates the ability of the business to self support its growth. In addition, the PCA ratio was improved as a result of the statutory impact and economic assumption changes, reflecting the improvement in the economy over the half.
Turning to the chart on the right on capital management. This provides some recent historical context regarding the payment of dividends. Prior to COVID-nineteen, Gemma has regularly paid out ordinary targeting a dividend payout ratio of between 50% to 80% of underlying NPAT. Existing on the ASX in 2014, Genworth has returned over 100 percent of after tax profit by way of ordinary and special dividends to shareholders. The company has also implemented other capital management initiatives, including share buybacks and capital reductions.
In 2020, due to the uncertain economic outlook, Regulatory guidance from APRA and the company's statutory net loss, the board concluded it would preserve capital and not pay an interim or final ordinary dividend. As noted earlier, the improvement in earnings and increased confidence regarding the eventual impact of COVID-nineteen on the company's capital position have allowed the Board to resume dividend payments. For the first half twenty twenty one, the Board has approved an unfranked interim ordinary dividend of $0.05 per share. This is payable to shareholders registered as of the 18th August 2021. Due to the prior year statutory loss in 2020 and the company's current franking position, the Intramor's return rate dividend will be unfranked.
The company is committed to responsibly managing its capital. And whilst there's still some uncertainty around how COVID-nineteen will ultimately play out in 2021, It's pleasing that we've been able to resume dividend payments during this half year. Moving now to Slide 9. I want to touch briefly on the separation of the company from our former majority shareholder, Genworth Financial Inc, or GFI. On the 3rd March 2021, GFI sold its entire 52% shareholding in the company.
As a result, key service agreements between Genworth Australia and GFI will terminate over time. We're working through the transition of relevant services We expect the main transition activities will be completed by the 31st March 2022 with some rebranding actions completing later in 2022. The costs are expected to be in the range of $15,000,000 to $19,000,000 with the bulk expense in 2021, including approximately $1,000,000 that's already been expensed in the first half. Moving now to Slide 10. GemWest has relationships 50 lender customers, including banks, building societies, credit unions and non bank mortgage originators.
Throughout the half, whilst managing large volumes of new business, we maintained excellent standards of customer service. At the end of the first half twenty twenty one, Genworth successfully renewed its contract with a large non major bank customer for the provision of LMI on an exclusive basis for a further 3 year period 2024. Importantly, ongoing customer renewals continue to exceed our ROE benchmark. We welcome the opportunity to submit a proposal to CBA during the coming months to extend our arrangements for the supply of LMI beyond 2020 2, building on the strong foundations of a long standing relationship. In addition, we're continuing to progress our customer centric Same growth strategy under the 3 pillars you can see on the slide, enhance, evolve and extend.
That will enable us to take advantage of our growing market. We've implemented a range of initiatives to improve efficiency and competitiveness. This has been primarily around automation and digital reporting. After a successful pilot of the monthly premium LMI products in late 2020, this new product is now in market and available through 2 lenders. We're in advanced discussions with other lender customers to extend the rollout of this offering further.
We're also how we might play a greater role in helping Australians to access homeownership, including evaluating partnership opportunities to offer new ways of bridging the deposit gap. The strategy work completed today is already enhancing our offerings to our lender customers through a greater alignment
Thank you, Pauline. Welcome to everyone on the call, and thank you for joining us today. I will start on Slide 4 with the income statement. During first half twenty twenty one, Genworth reported a $59,000,000 statutory net profit after tax and an underlying net profit after tax of $76,000,000 statutory NPAT was impacted by unrealized mark to market investment losses from arising government bond rates during the half. Gross written premium raised 21.1 percent to $290,000,000 over first half twenty twenty from higher LMI flow volumes across our lander customers with consistent underwriting quality.
Net earned premium in first half twenty twenty one increased 13.3 percent to $171,000,000 over first half twenty twenty. Continuing the stronger growth in gross written premium that began over the second half of twenty twenty. This strong new business flow will underpin earnings growth in future years. The change to the earnings curve in Q2 2021 Reduced net earned premium by $12,000,000 in first half twenty twenty one. This adjustment has the effect of lengthening The average duration of the period of premium revenue recognition to align with the path of net claims incurred, reflecting the slower emergence of new delinquencies noted earlier.
Net claims incurred was $49,000,000 or 51% lower than compared to $101,000,000 in first half twenty twenty. During the half year, the government and lender support programs Continue to interrupt the typical incidence patterns of delinquency behavior and claims with lower loss experience, high levels of curing And reduced aging, including as a result of moratoriums in placing properties into position. I will talk more about loss performance on Slide 14. And finally, investment income earned on technical and shareholders' funds The first half twenty twenty one was a small net gain of $1,000,000 compared to $50,000,000 in first half of twenty twenty. Moving on to Slide 13.
We have provided some further detail on new insurance written and gross written premium performance. New business volumes and claims experienced continue to be supported by the low interest rate environment, providing stimulus to housing markets through rising national dwelling values and strong consumer sentiment. New insurance written of $15,500,000,000 increased 14.7% over first half twenty twenty As owner occupiers and first time buyers have taken advantage of the low interest rates to enter the housing market, Genworth's lender customers continue to achieve above market lending growth rates. These higher business volumes were the main driver of our top line growth And we'll drive growth in net earned premium over the medium term. The key features of our loss performance are shown on Slide 14.
As we have mentioned, our claims experienced during the half continued to be impacted by government stimulus packages and the restructuring by lenders of home loans that have been on repayment deferral prior to 31 March 2021. Whilst the majority of these loans have resumed repayments, there remains a portion of the remaining loans that have been restructured or continue in arrears. Net claims incurred was $49,000,000 in first half twenty twenty one, down 51.2% on first half twenty twenty, reflecting lower levels of new reported delinquencies and aging as well as high levels of cures. The reported first half twenty twenty one loss ratio of 28.9 percent reflects both these trends as well as the benefit of strong house price appreciation over the half year and improving economic conditions. We saw lower paid claims in first half twenty twenty one of 325 claims due to the ongoing legal moratorium on repositions as well as improved house price appreciation.
During first half twenty twenty one, The average paid claim fell to $75,000 compared to $95,000 in the first half twenty twenty. This is due to an increased proportion of borrower sales and house price appreciation, both of which are helping generally reduce claim sizes. In terms of reserving, in Q1 2021, we had increased reserves by $23,000,000 including an amount of incurred but not yet reported reserves of $22,000,000 to compensate for the lower levels of reported delinquencies And Kate Flanus noted earlier, there was a small increase in reserves in Q2 2021 of $2,000,000 Looking at the second table on this slide, you can see that the lower value of new delinquencies for first half twenty twenty one compared to first half twenty twenty. It is still too soon to have seen much impact from the expiry of the repayment deferrals as of 31 March 2021. The cure's line represents the release from reserves of the delinquencies that are naturally cured, being $85,000,000 in first half twenty twenty one compared to $69,000,000 in first half twenty twenty.
This reflects the improved economy, house price appreciation and these support measures. Ageing of $35,000,000 represents the natural increase in reserves for delinquencies, which remain on our books over the year. Finally, the other adjustments line of $30,000,000 includes such items as COVID-nineteen Actual adjustments relating to policies affected by moratoriums, IBDR for repayment deferrals and an allowance for cured policies reentering arrears. On the bottom table of this slide, you can see the key movements in the outstanding claims reserve. As of first half twenty twenty one, the outstanding claims reserve was $567,000,000 compared to $399,000,000 in first half twenty twenty.
The outstanding claims reserve comprises both reported delinquencies, largely 90 day arrears reported by lenders and IBNR reserves were unreported or sub-ninety day arrears in addition to an 18% risk margin we hold on both these reserve levels. We have provided detail on the delinquency rate and trends in the supplementary slides, specifically on Slide 26. The delinquency rate has been relatively flat at 60 basis points in first half twenty twenty one compared to 62 basis points in first half twenty twenty. On to Slide 15 and our investment performance over this half. Investment income earned on technical and shareholders' funds for the first half twenty twenty one was a net gain of $1,000,000 compared to $50,000,000 in first half twenty twenty, which experienced realized gains due to falling bond rates.
It was really a sale of 2 quarters. In Q1 2021, there was a loss of $28,000,000 due primarily to higher unrealized losses on government bonds from an increase in bond rates during that quarter. These losses were partially reversed in the 2nd quarter as bond rates reduced, resulting in unrealized gains for that quarter of $15,000,000 Our annualized investment return for this half was 0.1% compared to 3.1% for first half twenty twenty, reflecting the unrealized losses and that investment returns continue to be pressured by the low interest rate environment. Between 31 December 2020 At 30 June 2021, the running yield of the investment portfolio improved from 50 basis points to 70 basis points net of fees, reflecting the increase in government bond rates and higher exposure to corporate bonds and equities to improve yield. Slide 16 highlights the continued strength of our balance sheet.
The asset side of the balance sheet consisted of a $3,600,000,000 cash and investment portfolio. The increased assets from second half twenty twenty reflects the strong new business And the lower claims paid. The cash balance tends to fluctuate in line with the timing of both investment settlements and liquidity management activities. In terms of liabilities, the movement in payables is due to the renewal of our reinsurance program on the 1st January 2021 and the timing of investment trade settlements. Our outstanding claims reserves were $567,000,000 This is higher than usual due to the reserving that has built up over the past 12 months to compensate for the reduced incidence of claims payments as a result of the repayment deferrals.
As of 30 June 2021, we have retained over $1,500,000,000 premium on our balance sheet, which we will gradually earn over future periods. On the 1st January 2021, We renewed our $800,000,000 reinsurance program, which is structured on a paid claims basis with policies in force plus 2 additional years of new insured treatment. Yes, our investment portfolio plus our potential reinsurance recoveries are essentially what is available to meet our claims planning obligations to our policyholders, providing us with over $4,400,000,000 of claims paying resources. Turning to Slide 17. GemWest retains a well diversified cash and investment portfolio with an average maturity of 4.2 years at an average duration of 2.4 years, which excludes equities and derivatives.
During the half, we reduced our exposure to Commonwealth government bonds and increased our exposure to corporate bonds and equities to improve yield. 94% of this portfolio is now held in cash and investment grade bonds. Turning to Slide 18 shows that our regulatory capital position remains strong. As at 30 June 2021, Genworth's PCA coverage ratio On a Level 2 basis, of 1.74x was above the top end of the Board's target range of 1.32x to 1.44x. This represented a surplus capital of $321,000,000 above the top end of the range.
The reduction in net premiums liability deduction reflected the improved economic outlook. The movement in asset risk charge during the half reflected the increase in our exposure to corporate bonds and equities. The chart on the right hand of this slide shows the trend increase in probable maximum loss, which increased slightly in first half twenty twenty one to $1,770,000,000 This reflects the higher volume of new business being written on our front book and to a smaller extent, a higher LBR mix business mix being written in the 80% to 90% LVR bands, meaning the amount of capital we are required to hold is gradually increasing. This is being supported by the capital being released by the in force runoff in the back book. With that, I'll hand now back to Pauline to wrap up the presentation.
Thanks, Michael. Turning now to Slide 20. Genworth has reported a strong first half results. The growth in written premiums in the half will underpin our earnings over the coming years. We have extensive underwriting experience through a range of economic cycles, and we'll continue to focus on strong underwriting quality and profitable customer renewal.
Over the coming periods, we will have increasing visibility over the ultimate claims outcomes from the COVID-nineteen pandemic. This visibility will gradually improve over the second half of twenty twenty one and into 2022, although we note it has been delayed by the latest round of mortgage repayment Importantly, Genworth has the capital strength and operational resilience that means we remain well positioned to withstand a wide range of future We're pleased to have been able to resume dividend payments in this half, and we'll continue to focus on improving returns to shareholders. We'll continue to review the appropriate level of capital for the company to hold as clarity emerges regarding the likely ultimate capital implications of the pandemic and to actively manage our capital resources. The operational and strategic initiatives that we implemented in 2020 Set the business up to benefit from the ongoing demand for us to achieve homeownership in a market where this is becoming increasingly difficult. We will continue to partner with our vendor customers to provide support to homebuyers who need help to bridge the deposit gap as well as to Our developing business strategy will set us up to take advantage And with that, I'll open up to any questions we have today.
Thank you. Our first question today comes from the line of Andrew Lyons from Goldman Sachs. Please
ask your question.
Thanks and good morning. Just two questions, if I may. Just firstly, you've noted that claims activity is Dan, what that might mean for your P and L claims expense? So I've then got a second question. Thanks.
Okay. So I guess the simple answer to the question is that if that experience that We see over the next and it probably takes 12 months or more from now to emerge. If that comes through as we expect, Then the reserves that we put aside will do what we need to cover that. And so the money will move out of reserves into claims paid Somebody is not on mute and typing. If the claims emerge at a lower level than we reserve for, then clearly the Reserve releases will be greater than what gets expensed to claims and have a positive impact on P and L and vice versa.
If the claims emerge At a higher level than we've reserved for, then the related reserves won't be sufficient to make the client payments, and it will have a negative effect on P and L. But that will all come through over the next probably 2 years.
Great. And just a second question. You've noted The company's capital position remains well above the top end of the target range. And I think you said it will be optimized as the Future capital requirements become clearer. Can you perhaps talk about what those future capital requirements might look like?
And Specific to the CBA contract, if that was to be lost, how quickly might the capital requirements of that contract be returned to shareholders?
So the first piece of clarity we're looking for on capital requirements is, of course, just how these plans play out for COVID-nineteen. So as we get more confident each period on how those plans are looking, that will give us better visibility of how much capital we ultimately need and how much is available for other things. The second, I guess, would be any strategic investment required to make the most of the opportunities in front of us. To be the third, of course, is then the pace of the ramp of the existing book. As you've noted this Period.
The ramp of the existing book generates pretty significant capital anyway, so it can provide a fair bit of flexibility. If we were to lose any one of our large customers, that will, of course, increase the rise of the capital divesting book, But it's not an immediate impact. It runs off over the life of the business running off. So it's not a one off windfall. Okay.
Thank you.
And our next question comes from the line of Andrew Vancom from Macquarie. Please ask your question.
Good morning, and thanks for taking my questions. 2 from me, please. Just the first one. Maybe if you can talk about your updated assumptions for unemployment and house prices and maybe how they've changed in the last quarter. I'm just trying to understand, is there still a buffer above the current rates?
Yes. We haven't disclosed our assumptions. It's not something we would normally disclose. Throughout the height of the pandemic, we did disclose. We thought it was important Provide some more visibility, but we've returned to our normal level of disclosure around that.
What I would say is that the assumptions in setting our assumptions, we take account the most recent economic data. That has been updated by what we've seen as of the end of June.
Okay. And then my other question was just maybe if you can give An update on your expected timing for the CBA tender? That would be great. Thank you.
We expect this to play out over the second half of the year, And we'll update you as we know more.
Congratulations on the results. Thanks for taking my questions.
Thank you.
And our next question today comes from the line of Simon Fitzgerald from Evans and Partners. Please go ahead.
Hi, there. I'm just I've got two questions here. Just firstly on the earnings curve changes. Can I just be clear that is this a change to the existing curves? Or are you introducing a new curve over the top, in which case You would only apply to new policies written post the 1st April.
Because just looking at that $12,000,000 impact, it seems rather large if it was only related to new policies, but perhaps you can give us a bit of a feel around that, but also if There's a full year impact we should be thinking about as well.
Yes. It is a change to the existing curve for the not just the new business, but For the all the policies that were on the most recent curve. And yes, there was a 1 quarter impact. The full year impact It's largely proportionate.
Proportionate. So then essentially, we should be thinking of yes, so we should be thinking then of also $50,000,000 impact on an annualized basis.
It's not quite that much. It's not quite
that much. It's not
quite that much, but it's
Okay.
Okay. So then just if we could also talk about capital, you did speak about the CBA tender in terms of the time frame in which that could come back to shareholders if there was capital released. And understanding that it wouldn't be a windfall, it would also reflect the earnings curve though as it would probably be accelerated at the front end as opposed to like amounts coming out over sort of 10, 12 years or something like that as those policies run off, If that would be a fair assessment. But also could I ask, is it easy to assume that out of that probable maximum loss that also Around about 57% relates to that CBA contract as was disclosed in FY 2020 as the GWP contribution.
Two comments on that. The run off of capital is slower than the run off of the earnings curve. The earnings curve, the premiums are earned over a 12 year period, Whereas the capital is held for the entire time that the policy is on the books. So it is lower, and there are other Factors that contribute to lengthening that. The 2nd, the 57%.
The 57% was the proportion of our revenue last year that was accounted for by CBA. The PML is driven by our in force portfolio. And The proportion of CV and the in force portfolio is lower than it was in the new business portfolio because of some of the large customers that have not been running new business That's over the last few years.
Okay. Okay. All right. Thank you very much.
That's very helpful. Thank you very much for that.
And your next question today comes from the line of Julien Brasinga from JPMorgan. Please go ahead.
Hi, guys. Just a couple of quick questions from me. Just firstly, in terms of Pricing, I know you mentioned some small benefits there coming through on pricing. But how do you think can you just How do you think about pricing, particularly given the impact of lower yields over the last couple of years? And has that been reflected in pricing going forward?
And just how should we think about that more broadly from a framework perspective? Thanks.
We price to achieve a target Return on equity, that's our primary driver in pricing. That target return on equity does vary From time to time, as the economy changes and as interest rates change, but it's not a one to one relationship.
Okay, great. Thanks. So and just in terms of the ROE, so obviously, we saw some improvement in the ROE from the last Quarter, given, I guess, the reversal of some of the I mean, some improvements on the investment side and also just the benign claims environment. So how should we think, I guess, how should we think about the ROE going into next year given, I guess, there's a lot of benefits coming through in the current period. But how should we think about the ROE going into next year towards achieving a more sustainable ROE?
I think it's just off the order of around 10%.
So it's not something we provide guidance on, but our Kent, over time, is that our portfolio level ROE blends towards our new business ROE. And if we do continue to write new business and it delivers the ROEs that we believe we're pricing it at, then over time, the portfolio will head towards the new business ROE.
Okay. Sure. Thank you. Thanks for that. And then just lastly, in terms of the earnings curve Change.
I'm just trying to understand exactly what that impact assumes around the delay in claims that you're assuming because obviously, you'd have had to assume what it means on the claims side to articulate just that deferral on the premium side. So Is that consistent with how you've reserved, etcetera? I think you mentioned it previously around actually a deferral of claims over the next 2 year period. But if you can just articulate Would your earnings curve change basically assumes around claims?
Yes. The entire intent of the earnings curve It's clear to create an outcome whereby revenue and clients are matched in their timing. So To the earnings curve is always an assumption. It's necessarily an assumption. We don't know exactly what the future will hold.
And so the actuary Attempt to refine that assumption or review that assumption based on the experience that's emerging, Not just the experience of the last 6 months, but they've looked at our experience over an extended period of time to try to come up with a long term assumption around The pattern of plans that we expect going forward. So the delays in the last few the last 12 months has a part of that, But it doesn't fully react to that.
Okay, great. Thanks so much for that.
It seems to have no further questions on the line today. I would now like to hand the conference back to your presenters for closing remarks.
Thank you. Thank you. Well, thank you, everybody, today for your interest and for dialing in. We have had a good start to the year, and it's been very pleasing to report a good profit and To again to be able to start paying dividends. The results reflect the strengthening economy we enjoyed in the first half and also the actions we took throughout 2020 to position us to be able to participate in that economic recovery.
Clearly, the latest lockdown has created a little bit more uncertainty, Although we have seen the economy bounce back well, and we're hopeful that we will see the same thing again, and either way, we are well positioned to be able to manage any volatility to come. We're well capitalized. We continue to enjoy the support of our lender customers. We continue to work more closely with them on how we can show up better for borrowers and help to make that easier for them to get onto the property ladder. And we believe this creates a great opportunity for the business, and we look forward to working with those vendors to help more borrowers into homes going forward.
I'll now hand back to the moderator to end the call.
Thank you. Ladies and gentlemen, that does conclude today's conference call. We thank you all for your participation.