Perpetual Corporate Trust hit by lower margins 27 February 2015 5:32PM John Kavanagh Strong growth in funds under administration in Perpetual's Corporate Trust division has been undercut by falling margins.The division contributed A$14.3 million of pre-tax profit to Perpetual Ltd group earnings during the six months to December.The result was 30 per cent up on the previous corresponding period, reflecting the contribution of TrustCo, which was acquired at the end of 2013.However, the division's result was down three per cent when compared with the June half last year. The division's margin on revenue was down one per cent over the same period.The division has two businesses: trust services, which includes trustee, custody, data warehousing, investor reporting and other services to the debt capital and securitisation markets; and fund services, which includes outsourced responsible entity, trustee and custody services to the funds management industry.The weak spot was in trust services, where revenue fell from $21.4 million in the June half last year to $20.8 million in the December half.The company said in its financial report that the launch of a data services solution for securitisation clients contributed $700,000 of non-recurring establishment fees in the June half. The non-recurrence of these fees was the main contributor to the revenue decline in the December half.The company said it was confident that enhanced data reporting requirements imposed on issuers in the securitisation market would provide a solid foundation for the data services business.The fall in the margin on revenue was due to a change in the business mix in trust services. Growth in funds under administration came from covered bonds and residential mortgage-backed securities issued for repo eligibility purposes.The company said these asset classes earn lower fees compared with other assets.The underlying business is sound. Trust services had $359.5 billion of funds under administration at the end of December, compared with $306.9 billion at the end of June last year and $294.2 billion at the end of December 2013.Fund services had $185.6 billion of funds under administration at the end of December, compared with $177.1 billion at the end of June last year and $171.6 billion at the end of December 2013.The company said that its acquisition of TrustCo had strengthened the overall business.