Non-major targets margin, capital efficiency over volume growth in third quarter
The book stood at $23.2 billion at 30 September, down from $23.6 billion in June, according to AMP's quarterly update published on Thursday. That leaves it about $722 million below the $23.9 billion recorded at the end of December 2025 and 1.7% lower than a year earlier. Total deposits eased to $17.6 billion from $17.8 billion over the quarter.
“Our focus in AMP Bank remains on optimising the balance sheet and reducing the capital intensity of this business,” said chief executive Blair Vernon (pictured). This has been a running narrative at AMP Bank for a while.
Margin over volume
In its first-half 2026 results on 6 August, AMP said it was managing the loan book for margin. It also completed $2.3 billion of securitisation – bundling home loans into bonds sold to investors to free up capital – leaving AMP Bank with an $89 million surplus above its capital target. Net interest margin narrowed to 1.25% from 1.3%, and underlying profit fell to $20 million from $30 million.
The bank's return on capital dropped to 3.6% from 5.2%, which AMP attributed to investment in AMP Bank GO and capital levels temporarily lifted by securitisation. Its common equity tier 1 (CET1) capital ratio rose to 11.6% from 10.1%. AMP has guided for net interest margin to hold at around 1.25% for 2026 as capital management continues.
Vernon, who took over after Alexis George announced her retirement as AMP chief executive, said the group was halfway through a $150 million share buyback and that releasing capital from AMP Bank remained a priority. AMP plans further capital relief transactions in the December quarter, subject to market conditions.
AMP is not alone in letting its mortgage book cool off. Several non-major lenders have chosen returns over market share in 2026.
BOQ’s home lending book shrank by $4.6 billion, or 8%, over the year to 31 August, according to full-year results also published today. BOQ put the fall down to lower settlement volumes and more loans running off during a year of major transformation. Over that year it moved all ME Bank customers off legacy systems and shifted mortgage origination to digital channels. By August, 88% of home lending applications came through digital channels.
Non-bank lender Liberty's residential mortgage book dipped to $7.67 billion from $7.75 billion over its 2026 financial year, even as motor, SME and SMSF lending lifted its total loan book.
Some capacity is leaving the market altogether. Suncorp Bank stopped accepting new mortgage applications from brokers and its own channels from 7 October as ANZ absorbs the brand.
Deposit overhaul reshapes AMP Bank's funding
Term deposits halved over the year to about $2 billion after AMP closed its legacy deposit products to new business, steering customers to its digital bank, AMP Bank GO, where deposits held at $1.7 billion.
Customer deposits fell 21% year on year to $10.5 billion, and AMP Bank's deposit-to-loan ratio dropped to 75% from 87%. AMP is targeting $2 billion in AMP Bank GO deposits for 2026, up from $310 million at the end of 2025.
After the Reserve Bank of Australia (RBA) lifted the cash rate to 4.6% last month – a hike all four major banks had tipped ahead of the meeting – AMP Bank raised variable home loan rates by 0.25% from 5 October, according to its October 2026 rate announcement. It lifted the AMP Bank GO Save rate to 5.5% at the same time.
“With AMP Bank GO we’re offering a high savings rate, without the usual catches,” said Sean O’Malley, group executive of AMP Bank.
