News Round Up

The Public Trust expects to return to profit next year after posting a loss of $7 million for the eight months to February.

Chief executive Tim Sole says the results for the four months to June will also be a loss and the 2002/03 year will only be marginally better than a break-even position.

"The transition to profitability will take time, and Public Trust will face an income gap from its new and cheaper estate management fees that will hit hardest in the 2002/2003 year."

The office is working through a restructuring which has resulted in changes to management and fee structures. Also there have been one-off changes over the past year including e-commerce systems and development costs; the reversal of fees after a new fee regime was introduced; and costs of the Public Trust establishing itself as a body corporate.

New legislation will mean the trust will earn at least $4 million annually for its social service duties to the government. Fees from managing group investment funds will give Public Trust an additional $1.4 million annually.

Although the majority of this is money from existing funds, the Advantage series has been pulling in new money, Tower general manager risk and investment products, Richard Baker says.

The Advantage series is made up of the Advantage Multi-Trading fund - essentially the GAM Multi-Trading Fund with a more efficient structure, and the Advantage Hedge fund which is based on Deutsche Bank's Strategic Value Fund. It is the more conservative of the two providing what Tower promotes as ‘bond like risk with equity like returns’.

Baker says although Tower is offering the GAM fund through the Advantage series it will continue to keep open the original New Zealand based version of the fund.

Westpac keeps its rating
Credit rating agency Moody's has affirmed the ratings of Westpac Banking Corporation (deposits at Aa3) following news that it planned to buy BT Financial Group.

Moody's believes the acquisition will significantly bolster Westpac's wealth management franchise in both Australia and New Zealand. BT's businesses provide a strategic complement to Westpac's existing wealth management operations.