Perpetual Corporate Trust, the country's leading corporate trustee, will target growth opportunities in mortgage servicing and processing in the current financial year as it waits for the asset backed securitisation market to come back to life.But growth in mortgage services at the expense of trustee work will depress the company's margins.Perpetual yesterday reported operating profit before tax of $29.5 million for its corporate trust division for the 2007/08 financial year. The result was 17 per cent down on the 2007 result. Revenue was up 22 per cent but expenses were up 67 percent. The big increase in costs was due to the acquisition and integration of Wignalls Lenders Mortgage Services in February last year and National Lending Solutions in July last year.Surprisingly, corporate trust funds under administration rose $12.8 billion to $229 billion in 2007/08. But $29 billion of this was the result of internal securitisation deals done by financial institutions to meet Reserve Bank repo eligibility guidelines. Perpetual said it did not earn much for administering these assets.Adjusting for the repo issues, underlying trust funds under administration declined eight per cent to $194 billion.Mortgage processing volumes increased from 40,000 to 95,000 transactions thanks to the Wignalls and NLS acquisitions. Perpetual chief executive David Deverall said there was a lot of activity in mortgage servicing and an opportunity for growth. Perpetual Corporate Trust, in a joint bid with Pepper, won the contract to service the book of Allco's mortgage business Mobius.However, growth in mortgage servicing in 2007/08 reduced the division's profit margin from 52 per cent in 2007 to 25 per cent. That trend is likely to continue.Deverall said management implemented a cost management review in the division. Staff numbers were reduced by 20 per cent and an office in Parramatta was closed.Overall, Perpetual reported a 29 per cent fall in net profit, from $182 million in 2007 to $129 million last financial year.