Despite issues raised at the Royal Commission, IOOF has today confirmed it is receiving an 82 per cent economic interest in the ANZ Pensions and Investments business.
IOOF made the revelation at the same time as reporting a significant lift in statutory half-year net profit after tax – up 200 per cent to $135 .4 million on the back of a six per cent increase in underlying net profit after tax from continuing operations of $100.1 million.
The big lift in net profit after tax was attributable in large measure to one-off non-recurring items including the after-tax impacts of the $34 million profit from the sale of IOOF’s corporate trust business, $25 million recovery of amounts paid in settlement of litigation and $28 million goodwill impairment of Perennial Investments Partners.
Commenting on the result, IOOF acting chief executive, Renato Mota said it was solid outcome in what represented a difficult first-half.
He said the company’s challenge ahead was to restore trust in circumstances where the Royal Commission had identified some serious failings within the industry and “given us cause for reflection”.
Mota said IOOF was accelerating changes within the business that would lead to better outcomes for clients and announced that IOOF expected to incur $20-$30 million in compliance and regulatory costs commencing immediately and into the 2020 financial year.
He said this included a review into advice quality as well as strengthening existing compliance and regulatory frameworks, but noted that the company’s review of advice to date had not highlighted any systemic issues.
On the question of the IOOF acquisition of ANZ’s dealer group and Pensions and Investments businesses, Mota said IOOF had completed the acquisition of the dealer groups and IOOF and ANZ also agreed to accelerate the economic completion of the transaction, with IOOF receiving 82 per cent economic interest in the ANZ Pensions and Investments business.
He said the ability to structure the economic completion of the P&I business demonstrated a commitment by both parties to the transaction.
“We are in constant and open dialogue with ANZ and are confident that clients’ best interests will be served by the transition to IOOF,” he said.