IOOF has defended its ability to be a significant competitor in the wealth management space and said the acquisition of the Axa North platform would allow it to accelerate its growth above market trend.
"We can confirm that we are a significant competitor in this space," IOOF managing director Chris Kelaher said yesterday at the presentation of the company's 2010 results.
"We think that the advent of the North transaction is almost a perfect marriage for us, in terms of providing us by March 2011 with leading technology, which we will be able to beneficially own and exploit over the years ahead, and combine that with over 20 years of administration experience and a high degree of experience in integration and migration skills," Kelaher said.
"It certainly would accelerate our growth above market trend versus our competitors over the proceeding couple of years," he said.
Kelaher said that the acquisition would contribute to IOOF's profitability in the first year.
IOOF's competitive strength is an important factor in the success of National Australia Bank (NAB)'s $13 billion bid for Axa Asia Pacific.
The ACCC has blocked the takeover based on the argument that NAB would become too dominant in the retail platform space, and it seems that the bank's only option is now to sell North to a strong enough player to form serious competition in this space.
But questions have been raised over IOOF's ability to become a major competitor in the retail platform industry.
IOOF, which has made a significant number of acquisitions in recent years, would not have been in existence for long enough to prove its strength, critics have said.
The company would also still face a number of platform integrations, which would hamper IOOF's ability to take on the complex integration of North as well.
But Kelaher brushed aside these criticisms.
"If I look back over time, I have been involved personally with nearly 40 transactions in the consolidation phase. I'm not sure how we go much further than that," he said.
"I think you have to go back to those people that made the observation and ask them to proof it."
IOOF made its final submission to the ACCC in support of its takeover of North last Friday, but the details will remain confidential, Kelaher said.
IOOF reported yesterday a net profit of $68.4 million over the financial year 2010, compared to $13.9 million in 2009.
The company said it had achieved $22 million in synergies from the merger of IOOF and AWM in 2008, while the takeover of Skandia last year has resulted in another $19 million in synergies.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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