Trustees Executors profit surges

Tuesday 6th March 2012

Trustees Executors, the trustee company chaired by former Prime Minister Jim Bolger, boosted annual profit by more than 10 times after shedding a liability from a failed mortgage fund.

Net profit was $5.9 million in the 12 months ended Sept. 30 compared to $508,000 a year earlier, according to the firm’s financial statements, lodged with the Companies’ Office last month. The firm slashed its mortgage management costs to $1.1 million from $6.1 million a year earlier after buying the last four guaranteed mortgages in the frozen Tower MortgagePlus Fund for $8.9 million.

By bringing the remaining assets of the fund in-house, Trustees Executors shed impairment charges it faced on future liabilities, having guaranteed the fund when it was frozen in 2008.

The profit was Trustees Executors’ biggest since 2007, before the fund was frozen. It paid out its first dividend since that year of $5 million, or $1.56 per share.

The $242 million mortgage fund, which was administered and promoted by Tower, froze repayments in the lead-up to the 2008 credit crunch, and was also the subject of a Serious Fraud Office investigation. That led to the white-collar crime investigator laying charges against Auckland property developer Malcolm Mayer over some $47.8 million of loans.

As at Sept. 30, Trustees Executors’ loans were valued at $3.7 million, against a face value of $4.4 million. In October, a partial settlement was made against the advances, with receivables reduced by $428,000 and the provision for doubtful debt unchanged.

The firm boosted revenue 12 percent to $28.6 million on bigger commissions and fees received and rising interest income in the latest year.

Trustees Executors’ biggest shareholder is Sterling Grace, a US-based investment firm that bought the company from Tower in 2003. The firm administers more than 350,000 individual trust accounts, and has $55 billion of assets under supervision, administration or management, according to its website.

(BusinessDesk)

BusinessDesk.co.nz

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