Securitisation Perpetual’s bright spot

John Kavanagh

Debt market services was the standout business for Perpetual Ltd in 2019/20, thanks to strong growth in the securitisation market.

While funds under management in Perpetual’s asset management division fell 13 per cent and funds under advice in its advisory services business were flat, funds under administration in its debt services business were up 33 per cent.

Debt market services is the biggest part of Perpetual Corporate Trust, the only one of the company’s three divisions that contributed higher earnings in the year to June.

The division produced a pre-tax profit of A$55.2 million, which was 16 per cent up on 2018/19. The group result fell 29 per cent to a net profit of $82 million.

Debt market services provides trustee, agency, trust management, accounting, document custody and servicing to the Australian debt capital markets and securitisation industry. It also provides data and analytics services.

Perpetual said the main reason debt market services had a good year was growth in the securitisation portfolio from new and existing clients, and growth in its automated treasury, credit and risk solutions (Perpetual Intelligence Platform).

Perpetual bought RFi Roundtables during the year, which also made a contribution.

Included in its funds under administration, bank issued residential mortgage-backed securities increased 11 per cent to $58.8 billion, non-bank RMBS increased 16 per cent to 72.6 billion, while CMBs and ABS fell 3 per cent to 41.9 billion.

RMBS repos increased 58 per cent to $384.3 billion and covered bonds were up 3 per cent to 80.5 billion. Corporate debt under administration grew 25 per cent to $18.1 billion.

In total, debt market FUA grew 33 per cent to $656.1 billion.