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Takeover target AXA reports 19pc profit dip
Takeover target AXA reports 19pc profit dip

Wealth manager AXA Asia Pacific has reported a 19 per cent drop in first half net profit and says management has not been distracted by its potential acquisition by National Australia Bank.

AXA reported net profit for the six months to June 30 of $219 million, down from $270 million in the previous corresponding period.

First half operating earnings were $270 million, up six per cent on the previous corresponding period's $255 million.

The results were in line with forecasts provided by the company last month.

Profit after tax and before investment experience and non-recurring items was $286 million, up eight per cent on the previous corresponding period's $266 million.

AXA declared an interim dividend of 9.25 cents per security, 10 per cent franked.

"As our performance demonstrates, despite the focus by others on the potential acquisition of our businesses by National Australia Bank and AXA SA, management's focus has been and will continue to be on business as usual," chief executive Andrew Penn said in a statement.

NAB is aiming to buy AXA APH, then on-sell the company's Asian assets to the company's French parent, AXA SA, while retaining the Australian and New Zealand assets.

NAB is seeking approval from the Australian Competition and Consumer Commission, which has expressed concerns that NAB would have too much power in the wealth management, and particularly the platform market, if the takeover was allowed to proceed.

Mr Penn said projected economic growth in Asia was well ahead of the rest of the world.

"As GDP per capita increases in developing markets the marginal dollar that is allocated to life insurance, savings and investments - the products that we sell - increases significantly," he said.

"That is why in our sector these markets are expected to grow at least two times as fast as GDP as they become wealthier."

AXA is also well-positioned to respond to anticipated regulatory changes in the Australian financial services and superannuation industries, Mr Penn said.

AXA's first half results included $4 million on non-recurring costs, with a $14 million tax benefit offset by $6 million in expenses associated with the proposed AXA APH ownership change and a $12 million write-off of prior year broker business in Singapore.

Operating earnings in Australia were up 25 per cent on the previous corresponding period to $94 million, while in New Zealand operating earnings were up 22 per cent to $16 million.

The gains were made on higher average funds under management as investment markets recovered and on growth in AXA's financial protection business.

In Hong Kong, operating earnings fell 20 per cent to $141 million, mainly due to unfavourable currency movements, AXA said.

When expressed in Hong Kong dollars, operating earnings rose slightly, as the company invested for future growth.

South East Asia operating earnings were up by 90 per cent on the previous corresponding period to $33 million (2009: $17 million), on growth in Indonesia and Thailand.

India, China and the ipac Asia operations posted a loss of $13 million.

AXA's funds under management were $78.44 billion at June 30, down three per cent from six months earlier.

The West Australian

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