Sovereign produces a bumper profit

Sovereign has posted an after tax profit of $65 million for the year ending June 30 and reckons it would have been much higher if the world sharemarkets hadn't tumbled.

This result, which was released along with the announcement that its parent company ASB Bank had produced an annual net profit of $225 million, includes a full year's result from Colonial and Colonial First State in New Zealand.

"While the result is pleasing and sets a benchmark against which to measure progress in future years, the difficult times the wealth management aspects of our operations have experienced, in line with international and New Zealand industry trends, have trimmed our inaugural financial result, Sovereign managing director Simon Swanson says.

He says there is "excellent potential" for Sovereign to achieve solid growth from our current base.

Over the year the company has consolidated its position as one of the major life insurance, wealth management and home mortgage lenders in the New Zealand market.

It is the country’s number one writer of life insurance business, with regular premium new business of $86 million and single premium new business of $179 million. The group’s in-force yearly premium income is now more than $500 million. The group currently commands about 34% of the insurance market and has 4% of the health business.

Sovereign is is the country’s number one non-bank home mortgage provider, advancing $739 million to home owners during the year, bringing the total level of our home mortgage lending to more than $2 billion.

"With about 24% of mortgage lending in New Zealand already being placed through mortgage brokers, and with this percentage growing rapidly, Sovereign is confident of increasing its share of the total mortgage market," Swanson says.

Funds under management and administration exceed $5.3 billion, of which our Aegis wrap service accounts for $1.8 billion.

Funds within Sovereign’s managed funds stand at $3.5 billion, making the Group the country’s third largest wealth manager with an 8% share of the market.

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