Tower to keep trustee business

Tower has done an about face and decided to keep hold of its personal and corporate trustee businesses in New Zealand and Australia and it plans to use them as part of a growth strategy.

The group says this strategy is provides the best use of shareholder capital.

Tower announced earlier this year that it was exiting the trustee business as it was not a core part of its operations.

It said, earlier, that "after extensive evaluation with the assistance of Boston Consulting Group, Tower has decided that 100% ownership of the personal and corporate trustee business of Tower Trust in Australia and New Zealand does not fit with our strategic position."

"The board has agreed to the divestment of this business, or at least a reduction in Tower’s ownership, which will, in the long run, produce a better result and be more consistent with the New Horizon strategy," former group managing director James Boonzaier said in July.

There has been speculation that Tower couldn't find a buyer, but it says a number of groups had approached it about the sale and gone through the due diligence process.

Because of recent changes in its management and structure as well as a loss in this financial year the group had decided not to proceed with the sale.

Rather the group has indicated it would review some of the changes it has undertaken and announce the results of this review early next year.

Tower says the trust business is profitable and will continue to contribute to the group’s retail and wholesale relationships despite the fact the group’s previous managing director James Boonzaier said at the time the sale was announced that it was consistent with a strategy that called for a stronger place in wealth management.

"Tower Trust has built a strong reputation for its integrity and reliability and is recognised as a provider of quality wealth management and trustee services to individuals, organisations and large corporations. Tower Trust is a profitable and growing business and it will continue to be an important contributor to Tower in enhancing its relationships with retail and wholesale customers, particularly through utilising its trustee status."