Westpac will talk with BT over agreement
(10 December 2009 – Australia) BT Investment Management (BTIM) has urged Westpac Group into talks about renewing their funds management agreement earlier than the original September deadline, after shareholders raised concerns about the impact of losing the contract would have on revenue.
BTIM has been the exclusive fund manager for certain Westpac retail funds, pooled superannuation trusts and statutory funds for the last two years; the contract is due to expire in September 2010.
The funds manager has requested talks begin earlier with Westpac, who owns 60 percent of BTIM, as Westpac has the option under the agreement to extend the contract by a further two years or move on.
Brian Scullin, chairman, BTIM, who has also taken on the role of chief executive until Emilio Gonzalez begins in January, told shareholders at the annual meeting in Sydney yesterday that the agreement that generated 50 percent of BTIM’s revenue is due to expire in September and rather than wait to see what Westpac would decide BTIM has requested that negotiations to extend or renew the contract begin immediately.
Mr Scullin also added that the bank had agreed to the talks; however he was unable to provide shareholders with a guarantee that the contract would not be lost.
It would be inappropriate for BTIM to in any way pre-judge what they may be prepared to agree to or even when Westpac will be able to come to some arrangement, Mr Scullin said.
BTIM are hoping that they should be able to make an announcement in the first quarter of next year, but has to emphasise that the timetable is out of their hands, Mr Scullin highlighted.
The current agreement came about after BTIM listed on the local stock exchange at the end of 2007; prior to that, the fund manager was part of Westpac.
Rob Coombe, a director of BTIM and Westpac’s new head of retail and business banking, said that discussions were being conducted with an enormous amount of goodwill and intent.
If you look at the performance that has been delivered to the customers of Westpac, how well the BTIM model has held up and the fact that there has been a continuity of service with investment professionals, at this stage there is no reason to believe that BTIM wouldn't see those agreements being renewed, Mr Coombe said.
The funds manager has requested talks begin earlier with Westpac, who owns 60 percent of BTIM, as Westpac has the option under the agreement to extend the contract by a further two years or move on.
Brian Scullin, chairman, BTIM, who has also taken on the role of chief executive until Emilio Gonzalez begins in January, told shareholders at the annual meeting in Sydney yesterday that the agreement that generated 50 percent of BTIM’s revenue is due to expire in September and rather than wait to see what Westpac would decide BTIM has requested that negotiations to extend or renew the contract begin immediately.
Mr Scullin also added that the bank had agreed to the talks; however he was unable to provide shareholders with a guarantee that the contract would not be lost.
It would be inappropriate for BTIM to in any way pre-judge what they may be prepared to agree to or even when Westpac will be able to come to some arrangement, Mr Scullin said.
BTIM are hoping that they should be able to make an announcement in the first quarter of next year, but has to emphasise that the timetable is out of their hands, Mr Scullin highlighted.
The current agreement came about after BTIM listed on the local stock exchange at the end of 2007; prior to that, the fund manager was part of Westpac.
Rob Coombe, a director of BTIM and Westpac’s new head of retail and business banking, said that discussions were being conducted with an enormous amount of goodwill and intent.
If you look at the performance that has been delivered to the customers of Westpac, how well the BTIM model has held up and the fact that there has been a continuity of service with investment professionals, at this stage there is no reason to believe that BTIM wouldn't see those agreements being renewed, Mr Coombe said.
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