St George Wealth Management a key driver of record interim profit

St George Bank’s Wealth Management division accounted for 12 per cent of the bank’s record interim profit of $568 million, with managed funds growing to $44.3 billion for the half year ended March 31, 2007.

This is largely attributed to the strong performance of its Asgard platform, driven by a combination of favourable investment markets, added distribution channels, investor confidence and product development.

While the bank’s overall profit grew 14.7 per cent , managed funds grew 19.2 per cent on the corresponding period last year.

Wealth Management’s 12 per cent contribution to the group’s pre-tax earnings has grown from 6 per cent since the same period in 2002.

According to a commentary released with the results, it is anticipated this arm of the business will “continue to exceed system growth” into the year ending September 30, 2007.

According to St George managing director Gail Kelly, the overall results “reflect an excellent contribution from all divisions”.

“Our strong revenue momentum has underpinned a significant decline in the expense to income ratio to an industry-leading 42.6 per cent,” she said.

Looking more broadly at the bank’s performance within the state and national economies, the group believes the continued tightening of monetary policy and its dampening affect on the housing sector will continue, with the Reserve Bank ofAustralia expected to maintain its “measured approach to moving interest rates”.

While expecting the New South Wales economy to continue lagging the national average and remaining subdued throughout the year, it believes the state’s housing slump will be offset by strong lending growth in Victoria, Queensland and Western Australia.