AMP profit almost halves on advice business sale, cost of simplifying its operations

[Pelican Press 0]

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AMP profit almost halves on advice business *****, cost of simplifying its operations

The cost of simplifying AMP’s wealth management and banking businesses has slashed profits — and a payout to shareholders.

AMP on Friday reported statutory net profit had plunged 43 per cent for the full financial year to the end of December to $150 million.

It blamed the fall on business simplification spending and the loss on the ***** of its advice business, while also noting the previous year’s result also included a gain on the ***** of AMP Capital and SuperConcepts.

Group underlying net profit was 15.1 per cent higher to $236m. AMP Bank was an underachiever, with underlying net profit dropping 22.6 per cent to $72m because of ongoing management of volumes and margins while it developed its new digital bank.

AMP’s superannuation and investments business returned a 26.4 per cent rise in underlying net profit of $67m, reflecting positive market conditions, reduced variable costs and improved cashflows.

It declared a final dividend of 1¢ a share, 20 per cent franked, taking the full-year dividend to 3¢ — down from 4.5¢ the previous year.

Chief executive Alexis George said AMP was building positive performance momentum and remained focused on growth.

“We sold and transitioned the advice business, hit cost targets and completed our $1.1 billion capital return program,” Mr George said.

“Our wealth businesses are competing strongly in their chosen markets, driving positive performance, and we’re launching new offers including digital advice.

“We saw improving trends in AMP Bank in the second half of the year, including a return to growth in the mortgage book as previously indicated. We continue to prioritise margins in a competitive environment, and this month’s launch of our new digital bank is an important way to start to address the funding and revenue mix.”

AMP launched its small business and consumer digital bank this month, with 11,600 early sign ups ahead of its release.

Overall costs were down 6.1 per cent to $648m.

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