31 August 2012 7:10am
Perpetual reported yesterday that its corporate trust division, which is the dominant provider of trustee services in the Australian securitisation market, suffered a 19 per cent fall in earnings in 2011/12.
The division made a pre-tax profit of A$17.4 million for the year to June, compared with a pre-tax profit of $21.5 million for the previous year.
Revenue fell from $57.2 million to $52 million. Funds under administration rose five per cent to $217 million.
The company said its lower earnings were due to "challenging markets". Issuance of residential mortgage-backed securities and asset-backed securities has continued to be weak since the financial crisis.
The company did, however, pick up the lion's share of mandates from covered-bond issuers. The Australian covered-bond market was launched late last year after changes to the Banking Act facilitated the entry of Australian banks into that market.
Perpetual is trustee for five of the six covered-bond programs launched in Australia this year. The company said that fees on covered-bond mandates were "significantly lower" than fees on RMBS and ABS.
Late in June, Perpetual announced that it would sell its mortgage-processing business, PLMS, which made up the other part of the corporate trusts division. The sale was completed on August 1.
Perpetual excluded the PLMS results from the division's results. The notes to the accounts show that PLMS made a pre-tax profit of $3.2 million for the year to June – down 15.8 per cent from the previous year.
Earlier this month, Perpetual Corporate Trust launched a new joint-venture business with Oliver Wyman and Morgij Analytics. The new business, MARQ Services, will offer investors detailed information about the mortgage pools in RMBS issues.
The idea is to make the data more accessible and more easily comparable, as a way of encouraging investment in the market.