Profit down, income steady, dividend jumps at JBWere NZ Investment News | Investment News NZ

JBWere NZ has seen net profits slide more than $8 million year-on-year as rising expenses cut into flat revenue for the soon-to-be-merged wealth management firm.

In accounts filed last week, the National Australia Bank (NAB) NZ subsidiary reported net profit after tax of almost $19.5 million over the 12 months to the end of September 2023 compared to more than $27.5 million in the previous year.

Total income fell about $100,000 during the annual period to just under $86.3 million as operating costs jumped from $48 million last year to $59.1 million in the latest accounts.

Revenue came mostly by way of management fees of $72.9 million ($68 million last year) while brokerage income dropped to $12 million from $17.7 million 12 months prior.

Staff expenses rose $10 million year-on-year from almost $34.6 million in 2022 to $44.7 million: other operating costs increased from $13.3 million to $14.3 million during the same period.

The company issued an annual dividend of $25 million in December, more than double the 2022 shareholder pay-out of $10 million.

At the same time last year, NAB struck a deal to bundle-up JBWere NZ with the local Jarden wealth management businesses and the BNZ funds arm (including its KiwiSaver scheme) to create a new entity dubbed FirstCape.

The NAB-owned Australian JBWere will own about 45 per cent of FirstCape with Pacific Equity Partners to acquire 35 per cent, leaving the remaining 20 per cent for Jarden.

Collectively, FirstCape would represent almost $30 billion of assets under advice and administration and a further $15 billion of funds managed by BNZ and Harbour Asset Management (owned almost 80 per cent by Jarden).

JBWere NZ, headed by Craig Patrick, has more than 30 advisers operating under its banner – a similar size to the Jarden network – targeting high net worth and institutional investors.

The local JBWere business provides custody to several NZ institutions, including the Fisher Funds-owned Kiwi Wealth, as well investment and advisory services to groups such as the Medical Assurance Society (MAS).

MAS has long used JBWere as custodian, investment adviser and as underlying manager for some assets. The medical sector financial services specialist has more than $2 billion of funds under management, including a $1 billion plus KiwiSaver scheme.

After moving from a restricted scheme model to a public offer KiwiSaver a couple of years ago, MAS recently opened a retail fund suite featuring the similar underlying investment options.