Enlarged Sovereign Produces $65 Million Benchmark

21 August 2002

Enlarged Sovereign Produces $65 Million Benchmark Result

Statement made by Simon Swanson, Managing Director, Sovereign Group

Financial services group Sovereign has posted an audited after tax operating profit of $65 million for the year ending 30 June 2002.

This result incorporates the full year’s business of Sovereign, and the former operations of Colonial and Colonial First State in New Zealand.

It reflects the consolidation of Sovereign as one of the major life insurance, wealth management and home mortgage lenders in the New Zealand market.

While the result is pleasing and sets a benchmark against which to measure progress in future years, the difficult times the wealth management aspects of our operations have experienced, in line with international and New Zealand industry trends, have trimmed our inaugural financial result.

There is excellent potential for Sovereign to achieve solid growth from our current base.

Our product and service values are based around seeing future trends in the areas of wealth accumulation, management and protection, and then using our advanced technology to develop relevant, flexible responses.

We are focused on seeing customers as individuals, and this is winning us market share across our product range.

During the year Sovereign consolidated its position as the country’s number one writer of life insurance business, with regular premium new business of $86 million and single premium new business of $179 million. The Group’s in-force yearly premium income is now in excess of $500 million.

Sovereign is now firmly established as the country’s number one non bank home mortgage provider, and during the year we advanced $739 million to home owners, bringing the total level of our home mortgage lending to in excess of $2 billion.

With about 24% of mortgage lending in New Zealand already being placed through mortgage brokers, and with this percentage growing rapidly, Sovereign is confident of increasing its share of the total mortgage market.

Sovereign is the country’s largest life insurer with a 34% market share and the third largest provider of health insurance, with a 4% market share.

Funds under management and administration exceed $5.3 billion, of which our Aegis wrap service accounts for $1.8 billion.

Funds within Sovereign’s managed funds stand at $3.5 billion, making the Group the country’s third largest wealth manager with an 8% share of the market.

Sovereign writes all its business through independent financial advisers and brokers, and does not have tied agents nor does it deal direct with the public.

Sovereign employs over 800 people throughout New Zealand.

NOTE: Sovereign Group is a subsidiary of Commonwealth Bank of Australia.

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