AXA earnings fall

Wednesday 6th August 2008

AXA New Zealand, the country's biggest fund manager for individuals, posted an 11% drop in operating profit on reduced earnings from wealth management and costs to install new operating systems.

Operating earnings fell to NZ$27.1 million in the six months ended June 30, from NZ$30.6 million a year earlier, the company said in a statement. AXA KiwiSaver funds under management surged to NZ$79 million from NZ$23 million.

The results reflect "AXA's strength in a challenging external environment," chief executive Ralph Stewart said.

The fund manager this week suspended wholesale withdrawals from its NZ$229 million mortgage-backed bond fund and warned it may extend the freeze to small investors to prevent a run on funds that would undermine liquidity.

AXA New Zealand's operating earnings from wealth management fell to NZ$7.3 million from NZ$10.2 million. Earnings from insurance fell to NZ$19.8 million from NZ$20.4 million. Total management expenses rose 12% on investment in new operating systems, it said.

Yesterday, shares of parent Axa Asia Pacific Holdings jumped 7.2% after the Australian company said earnings excluding investments rose 11%.

By Jonathan Underhill

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