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National Australia Bank Limited (NAB) remains committed to its proposed takeover of AXA Asia Pacific Holdings Limited (AXA), with the bank in discussions to address the concerns of the Australian Competition and Consumer Commission (ACCC), which recently blocked its bid for AXA. This morning, AXA and NAB said they had extended an agreement of cooperation on the deal, set to expire today, to 15 July 2010.

In mid-April the ACCC said it would support AMP’s rival bid for AXA Asia Pacific over NAB, saying that NAB’s already had a current wealth management platform, which would result in significantly less competition.

However with the extension of the cooperation and ongoing discussions, the door has been left ajar for a successful bid from NAB.

At the end of March NAB announced the $4.6 billion deal to purchase the wealth management division of AXA Asia Pacific.

At the close Monday, NAB shares were trading at $24.63 each, while AXA shares were at $5.82.

Suncorp-Metway Limited (SUN) doubled the size of its RMBS offer from $500 million to $1 billion in response to significant investor demand. The company said a total of 14 investors participated in the transaction with the majority of the Class A1 notes bought by domestic fund managers.

Suncorp said the Australian Office of Financial Management bought all of the Class A2 notes.

CEO, David Foster, said the issue further supports the bank’s strong funding and liquidity position, lengthens the balance sheet and underpins profitable growth for the company.

“The broad investor support in the A1 tranche was very pleasing, particularly with the backdrop of the current global market volatility,” Mr Foster said.

“It is a testament to the quality of Australian mortgages as collateral which is highly valued by investors.”

Suncorp said the notes are backed by a pool of prime residential, first ranking mortgage loans denominated in Australian dollars and originated by Suncorp.

The company said the notes are floating rate, principal pass-through, secured, limited recourse, rated securities.

As at 1542 AEST, Suncorp shares were up 10c to $8.11.

Tower Limited (TWR) reported a 5.9% increase in net profit to $27.9 million for the six months to 31 March 2010, compared to the previous corresponding period. The company said the strong result reflected good performances by all three of its businesses, which includes Health & Life, General Insurance and Investments.

Revenue for the period rose 30.4% to $288.9 million.

Tower said recognising this performance, it has decided to pay its first interim dividend since July 2002. The company declared a fully imputed dividend of NZ4c per share to be paid on 2 July.

Managing director, Rob Flannagan, said the company’s liquidity position is very strong with around $NZ150 million of cash balances at 31 March and a gearing ratio of 16.2%.

”This places TOWER in a great position to act quickly on expansion opportunities which arise,” Mr Flannagan said.

”We have investigated several opportunities in the past few months and continue to do so.”

At the close of trade Thursday, Tower shares were trading at $1.43.

Perpetual Limited (PPT) expects FY10 net profit after tax to be in the range of $85 million to $95 million, more than double last year’s result. The funds manager said the prior year’s result was adversely affected by the steep market falls.

Perpetual said the forecast result assumed no impairments within the Exact Market Cash Fund or other significant items.

In a letter to shareholders chairman, Robert Savage, said subject to there being no dramatic deterioration in financial markets and business conditions over the remainder of the financial year the company expects its second half year underlying profit to be broadly in line with its first half results.

“We expect the underlying profit after tax (UPAT) for the 12 months to the end of June 2010 to be in the range of $65 million to $75 million,” Mr Savage said.

”This includes the impact of acquisitions and continued investment in our businesses.”

UPAT excludes gains or losses on the sale of investments; and gains from the Exact Market Cash Fund generated from improved credit markets.

However, Mr Savage did point out that the nature of the business means it is leveraged to the fortunes of financial markets.

As at 30 April 2010 Perpetual’s funds under management were $29 billion, up 11% on 30 June 2009, while funds under advice, including increases from acquisitions, were up 28% to $8.7 billion in the same period.

”Given the sensitivity of our funds under management and advice to market movements the downturn in May will have an impact,” Mr Savage said.

As at 30 April 2010 securitised funds under administration were down 11% to $215 billion compared to 30 June 2009.

At 1453 AEST, Perpetual shares were up 25c to $30.08.

Tower Australia Group Limited (TAL) posted a net profit after tax of $28.4 million for the six months to the 31 March 2010, up 5% compared to the previous corresponding period. The specialist life insurer also announced plans top raise $96 million through an equity raising as the company continues to pursue and support growth opportunities as they arise over the medium-term.

Looking at the half-year results, Tower said underlying profit was 4% higher at $39.9 million in the same period.

Chairman, Rob Thomas, said the company had produced a solid result, successfully growing both its underlying profit and key value measures during the half.

“We saw in late 2009 a period of higher death claims but this has stabilized,” Mr Thomas said. 

“An increase in salary continuance type claims is occurring and is not unexpected in times like this but overall the company has continued to make steady progress and we have seen strong value growth delivered for the business.”

Managing Director, Jim Minto, said business growth had occurred across all channels as people accessed life insurance and met their protection needs.

“We have seen some slowing in growth rates across the Retail advice market in the first quarter of 2010 but the outlook remains robust,” Mr Minto said.

“Our investment in InsuranceLine continues to produce positive results in both sales and providing customers with easier access to life insurance.”

Mr Minto said the Tower’s prospects remain positive with the company well placed as an independent insurer and the market for life insurance continuing to grow above 10% per annum.

“At a recent briefing we indicated that in underlying profit terms we believe we will complete the full year within the consensus of analyst forecasts and this remains our view,” he said.

In terms of the capital raising, the company said it was on the basis of a 1 for 7 renounceable pro-rata share entitlements issue, with new entitlements to be priced at $1.85.

“We are seeing strong growth and a lot of change in the industry partly from regulatory impacts and partly from consolidation,” Mr Thomas said.

“We want to strengthen our capital base and increase flexibility to position ourselves to take advantage of any opportunities which may arise and hence the share entitlements issue.”

Tower decided to make this an offer to its existing shareholders rather than make a market placement.

As at 1056 AEST, Tower shares were down 34c to $2.04.

Australia and New Zealand Banking Group Limited (ANZ) confirmed that Fitch Ratings had revised the outlook on the group’s Longterm Issuer Default Rating to AA- Outlook Positive from AA- Outlook Stable.

In its statement on the outlook change Fitch said, “the ratings of ANZ, including the change in outlook, take into account the group's improved earnings diversity following the full acquisition of its wealth management operations, the potential diversification benefits provided by the Asian expansion strategy and its generally improved financial profile.”

As at 1055 AEST, ANZ shares were down 57c to $20.06.

Suncorp-Metway Limited (SUN) said its general insurance business would improve its underlying margin by at least 3% over the next two years. The company said the improvement in the underlying insurance margin would be underpinned by the group’s Building Blocks program, which would deliver $235 million in annual benefits by June 2013.

Suncorp said the program would consist of five key projects providing one view of insurance pricing and claims, as well as the group’s customers, employees and finances.

The company said project costs of $120 million would be absorbed within the existing cost base by cutting discretionary spending and redirecting other capital expenditure.

CEO, Patrick Snowball, said Suncorp’s move to a functional model and a single view of pricing and claims would ensure the general insurance business leverages scale advantages across all of its brands and unlocks the potential in functional capability that has not been realised to date.

Personal insurance chief executive, Mark Milliner, said the strategy was to move from a portfolio of separate businesses to a single functional model.

“One pricing system and one pricing team gives us a consistent view across the portfolio and minimises conflicts between brands, which will help lift yield on new and renewal policies,” Mr Milliner said.

“A single claims model will reduce repair costs and times and optimise our purchasing systems but, more valuably, it will allow our brands to share knowledge and resources when and where it matters most.”

The company said its commercial insurance business is targeting market share growth, particularly in the SME segment.

Commercial insurance chief executive, Anthony Day, said the commercial insurance business would also benefit from simplified structures that reduced duplication and contained expenses.

Suncorp said its Vero New Zealand business plans to double sustainable net profit after tax by June 2013.

As at 1025 AEST, Suncorp-Metway shares were down 18c to $7.81.

AXA Asia Pacific Holdings Limited (AXA) said, today at its AGM, it was still unable to advise what the outcome of discussions with suitors AMP Limited (AMP) and AXA SA, as well as National Australia Bank limited (NAB), may be. In the wake of the Australian Competition & Consumer Commission’s (ACCC) recent decision to oppose NAB’s acquisition proposal, AXA APH said if a satisfactory conclusion is not reached by 31 May, it can then decide whether or not to terminate the agreement made to implement the NAB proposal.

AXA APH chairman, Rick Allert, said NAB and AXA SA have the same right. “Termination is not automatic and will only occur if one of AXA APH, NAB or AXA SA exercises that right,” Mr Allert said.

He also noted media speculation that AMP would make another proposal.

”In the event that any new proposal is received from AMP, or anyone else for that matter, your independent directors will consider it on its merits subject to any legal restrictions under the current agreement with NAB and AXA SA,” said.

Meanwhile CEO, Andrew Penn, said the outlook for the company is “very positive”.

“However, the climate has changed in the wake of the Global Financial Crisis and demand for regulatory change to address the perceived failings of the system has inevitably increased,” Mr Penn said.

As at 1122 AEST, AXA APH shares were down 4c to $5.95, while AMP shares were down 7c to $5.74 and NAB shares were 5c lower at $24.80.

Australia and New Zealand Banking Group Limited (ANZ) announced the completion of its acquisition of The Royal Bank of Scotland’s ("RBS") retail and commercial businesses in Singapore. The acquisition means the company now has six branches in Singapore, with over 300,000 customers.

ANZ CEO Asia Pacific, Europe and America, Alex Thursby, said the company has strong positions in retail banking, wealth management, private banking, commercial and institutional banking.

ANZ said it would officially open its new Singapore branches today, while it has re-branded the five RBS branches and 19 ATMs.

The company said Singapore is the fifth of six markets where RBS businesses have transitioned to ANZ following the completion of the RBS acquisitions in the Philippines, Vietnam, Hong Kong and Taiwan.

ANZ expects to complete the remaining acquisition in Indonesia in June.

At the close of trade Friday, ANZ shares were trading at $22.81.

AMP Limited (AMP) CEO, Craig Dunn, said at the insurer’s Annual General Meeting this morning that the proposed merger with AXA Asia Pacific (AXA) remains strategically attractive and would accelerate AMP’s growth strategy further.

Mr Dunn said he transaction still has some way to go, and the company’s immediate focus is to work through the relevant regulatory matters.

He also welcomed the Australian Competition and Consumer Commission’s decision that competition in the sector would be best served by the proposal.

”While M&A can provide a useful means to accelerate our growth strategy, we don’t see it as a strategic necessity,” Mr Dunn said.

”Our primary focus is to grow through a series of change initiatives to revitalize AMP, with new and more competitive products and funds, new services and new ways to do business with us.”

NAB launched a rival bid for all of the assets in AXA, which was knocked back by the ACCC last month.

AMP chairman, Peter Mason, said at the AGM today the company believes it can put forward a proposal that is both financially disciplined and able to create value for shareholders.

“M&A activity takes both patience and perseverance to ensure that real value is created for all shareholders,” Mr Mason said.  

”This is not something that we will rush.”

As at 1045 AEST, AMP shares were up 13c to $5.97, while AXA APH shares were up 7c to $6.06.