Tower banks on Australia

NEW Zealand-based financial services groupToweris banking on the performance of its Australian wealth management operations in a bid to stave off a growing level of discontent among its New Zealand shareholders.

Tower managing director James Boonzaier was confronted at the group’s annual general meeting in Wellington by shareholders voicing their concerns about the group’s languishing performance. Tower announced at the meeting that its net profit for the 12-months to September 2001, had dropped four per cent to NZ$77 million, a figure that was boosted by a NZ$17 million business revaluation.

Boonzaier blamed the result on the group’s poor investment returns, which had been affected by the “worst investment climate for 25-years”. But Boonzaier says Tower would look to overturn the result by narrowing its focus to wealth management, particularly in Australia.

Tower this year created Tower CU Alliance (TOCUA), a new business unit to channel its wealth management products through Australian credit unions, which Tower has had a relationship with since it bought dealer group Bridges Financial Services in 2000.

Bridges, previously owned by the Credit Union Services Corporation (CUSCAL), recorded a 20 per cent increase in profits in the year to September, 2001.

Tower also used the meeting with New Zealand shareholders to again flag its intention to investigate moving its base to Australia, where two-thirds of its business now lies.