Helia Group has warned its outlook remains tough after today announcing a rise in earnings for the June half.

The lenders’ mortgage insurer’s underlying net profit after tax increased 18% to $126.1 million and gross written premium surged 28% to $109.9 million.

But business will be affected next year when its contract with Commonwealth Bank – which represented 40% of Helia’s first-half GWP – runs out at the end of December.

Helia is also preparing to lose another major customer, after ING Bank opted not to renew its contract, which expires on June 30 next year. That contract accounted for 21% of GWP in the June half.

“While the half-year financial results were very positive, we did have a number of setbacks,” interim CEO Michael Cant said this morning during an earnings briefing.

“The likely loss of Commonwealth Bank and ING as customers will reduce new premiums from 2026 … it was obviously disappointing to lose two of our largest customers.

“However, we did successfully renew and extend our LMI contract with another top 10 lender.”

Mr Cant says the Commonwealth contract loss means “we will not have any major bank customers in the near term, and this will have a noticeable impact on GWP and new business market share”.

Helia also faces headwinds from the expansion of the federal government Home Guarantee Scheme for first-time residential owner-occupiers. This is likely to result in most first home buyers using the scheme from next year.

“This expansion is on top of the significant impact that the Home Guarantee Scheme has already had on the LMI industry,” Helia said.

First-time owner-occupiers represented 25%-30% of Helia’s GWP in the June half.

The company has begun a review of alternative business options.