St George slashes Wealthpoint goodwill figures

St George Bank has cut the goodwill in its financial planning platform and research resources group,WealthPoint, by more than half, dropping the figure from $135 million to $63 million following an extensive review of the bank’s wealth management businesses.

Wealthpoint is the parent company for research houseAssirtand stock research group Bourse Data, which was purchased by St George in August of last year after it had spun off the two groups to form Wealthpoint in September 2000. WealthPoint also supplies a number of software platforms to financial planners using the group’s research data.

According to St George, after the valuation of WealthPoint had been reassessed, and $72 million of goodwill was written off, the remaining balance of unamortised goodwill relating to WealthPoint is $63 million at March 31, 2002.

The write off comes after an extensive review of wealth management operations had been undertaken by St George in conjunction with the Bains Group.

As part of the announcement, St George says its priorities lay in leveraging its customer base by providing “whole of wealth” value propositions to targeted markets and would expand profitable growth businesses through internal and external distribution channels.

St George says the review has also emphasised the need to restructure its investment services division to the point where they are key sources of income for the group.

While there are a number of valuable businesses in the portfolio, they are at different stages of maturity, have different profitability outlooks and risks attached, the bank says. And while the group continues to pursue a range of business opportunities with these companies it is recognised that they are at different stages of development, and have a range of risk profiles.

These companies include Ctel Technologies Pty Ltd, Autobytel Australia Pty Ltd, thechamber.com.au, marketboomer Pty Ltd, Nextsurance Pty Ltd, Stockford Ltd and Virtual Communities Ltd and have also received a substantial write down, moving from $22 million ($15 million after tax) to a carrying value of $4.0 million.