By Peter O'Brien
Friday 7th July 2000
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It follows considerable development of integrated financial services among the Australian-based traditional insurance companies and banks.
NZ Post Enterprises chief executive John Allen said the move was consistent a strategy to provide a range of financial services through Post Shops but was not directly related to possible involvement in the People's Bank under government instigation.
He said Post Shop customers would have access to Tower investment statements and prospectuses and the ability to make investments over-the-counter through NZ Post's secure Post-Link system. Many people already used Post Shops for postal services and the ability to pay a variety of bills. Traffic through Post Shops should increase markedly if the outlets were used as effective branches of any People's Bank.
Tower group managing director James Boonzaier said the company was developing a new category of managed fund based on competitive pricing, simple structure and attractive features that would lower the barriers to entry and reduce the disincentives to saving and investment. That remains to be seen, because any promoter of managed funds would say its products were tailored to the same objectives. Consumers decide what products suit particular needs.
Tower issued its interim report a week before the announcement. Net profit for the six months ended March was $38.63 million, a 2.4% increase over the $37.71 million earned in the pro forma corresponding period of the previous year.
With the benefit of hindsight, comments from Mr Boonzaier at the time could be seen as hinting at the NZ Post deal: "Our commitment to acquisition on both sides of the Tasman and a developing focus on the creation of mutually beneficial strategic alliances and partnerships are key drivers in Tower's business development strategy."
Tower's share price improved recently to $5.25 after hitting a low of $4.25 earlier in the year but was below the year's high of $5.87.
AMP has improved and on Wednesday jumped 51c to $22.26, its high for the year, compared with the low of $17.40. Axa Asia Pacific (formerly National Mutual) was at $3.16, above mid-point between the 2000 high of $3.35 and the $2.60 low.
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