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National Australia Bank has adopted a market valuation of $4,648 million (as at June 30, 2000) in relation to the MLC Group. The valuation included "Embedded Value" of $2,358 million, comprising Net Assets of $876 million and "Value of Life Business In-force" of $1,482 million. It followed the National's receipt of an independent valuation of MLC Group by consulting actuaries, Tillinghast. The National's Chief Financial Officer, Richard McKinnon said the company was very pleased at the outcome of the valuation. It demonstrated the quality of the MLC Group and the benefit of having a thorough and cordial period of negotiations with Lend Lease Corporation. "The integration of MLC into the National Group has proceeded smoothly and on schedule since the acquisition," Mr McKinnon said. "The latest valuation has confirmed that we have obtained a high quality company that will provide significant long term synergy benefits and value for our Group," he said. The National confirmed today that the structure of its Wealth Management Division headed by former MLC chief executive, Peter Scott had been finalised. Also confirmed were appointments to the Board of National Wealth Management Holdings Limited. The Chairman is Geoff Tomlinson, currently a member of the National Australia Bank Principal Board. Other directors are: Mr Frank Cicutto, Mr. Michael Codd, Mr. Ian Crow, Mr. Peter Flavel, Mr. John Moule, Mr. Peter Scott, Mrs. Catherine Walter, Mr. William Webster and Mr. Alec Wickenden. The National noted that in accordance with Accounting Standard AASB 1038, the market value of the subsidiaries of National Australia Financial Management Limited (NAFM) will be assessed at the end of each accounting period and the holding values adjusted to the then current market values. Any gains or losses in value will be calculated on an after tax basis and will be accounted for by NAFM as profit or loss for the period. The MLC Group is a wholly-owned subsidiary of NAFM (see Attachment) and accordingly its value will be marked to market at the end of each accounting period. Tillinghast has been asked to advise the National about an appropriate adjustment to their June 30 valuation for the purposes of the year end September 30 accounts. This work is not yet complete. The National plans a full valuation by an independent actuary as at the end of December and June of each year. These valuations will be adjusted, under actuarial advice, for the purposes of the March half year and September full year results. Actuarial advice will also be taken in relation to the valuation of these subsidiaries for the purposes of the December and March Quarterly results. In forming their view of market value at the end of each accounting period Directors will take account of all relevant factors influencing market value, including the actuarial valuations referred to above, movements in the embedded value of the business and the estimated value of new business. Melbourne, October 11, 2000. Further information:
Ron Burke
General Manager
Global Corporate Relations
Tel: (03) 8641 3876.
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