Permanent hit hard by change

Permanent Trustee appears to be suffering from structural changes in the financial services busi-ness, recording a 74 per cent decline in net profit for the six months to March 31.

Permanent Trustee appears to be suffering from structural changes in the financial services busi-ness, recording a 74 per cent decline in net profit for the six months to March 31.

Permanent posted a net profit of $2.3 million for the half year, after its revenues were also sav-aged, falling nearly 50 per cent to $16.9 million.

Permanent says the profit fall is largely due to the Managed Investments Act which allows fund managers to have a single responsible entity for its investments, thus making many trustee ac-tivities redundant. The company had also been hit hard with the costs associated with trans-forming from a traditional trustee company to a broad-based financial services provider covering private client services and funds management.

However, Permanent says its cost structure has been reduced by 30 per cent over the past year, consistent with its need to adapt to changed circumstances.

Managing director Paul Lahiff says he expects the second half to similarly trend based on in-creased flow from current and newly established business and tight cost management.

"We are also in the progress of securing acquisition opportunities as well as organic growth to build our business in core areas," he says.