Perpetual slashes costs

Perpetual Ltd reported an increased contribution from its corporate trust division for the December half. The division, which is the leading trustee in the securitisation market, had no revenue growth but slashed expenses to produce a big increase in profit.

Corporate trust operating profit was $20 million for the December half, up 47 per cent on the previous corresponding period.

Revenue was flat - $41 million compared to $41.6 million in the previous period. Operating expenses were cut from $26.4 to $19 million.

The division's funds under administration increased from $222 billion to $246 billion. There was very little issuance of RMBS, CMBS and other securitised assets into the market but Perpetual picked up business from the wave of internal securitisation for RBA repurchase eligibility.

Perpetual also picked up a mortgage management mandate from a bank for its non-bank originations.

The overall result for Perpetual for the half was a net profit of $14.2 million, down 84 per cent on the previous corresponding period.

After adjusting for a loss on the sale of investments, losses on trading in a structured product and restructuring costs, the group reported an operating profit of $62.1 million, down 46 per cent on the previous period.