Signs of life after a near death experience for AMP, the struggling Sydney based wealth manager as it revealed a sharp rise in interim profit on Thursday.
The company said its first-half underlying profit rose 57%, helped by stronger AMP Bank earnings and investment income.
Like its bigger peers (CBA, ANZ, Suncorp, NAB), AMP Bank benefited from the release of previous loan loss provisions.
Underlying net profit after tax from the company’s retained businesses rose to $181 million, from $115 million reported a year earlier.
Statutory net profit was $48 million, down from $58 million and “reflects the impact of pricing, legislative changes and advice practice impairments, partially offset by lower variable and controllable costs from cost reduction initiatives,” according to the company.
AMP Bank said its first half profit jump 76% or by $38 million to $88 million ($50 million a year earlier), in part due to a $12 million release of credit loss provision taken in response to COVID-19.
Net cash outflows of $2.7 billion in 1the June half was an improvement from $4.0 billion net cash outflows the June, 2020 half year. Cash outflows include $1.0 billion in regular pension payments to clients in retirement.
No interim dividend so loyal shareholders are left to solider on without any income.
The company justified the no interim policy saying the “board to maintain (its) conservative approach to capital management and dividend until requirements for the demerger and future strategies are finalised.”
In prepared remarks, new CEO, Alexis George said:
“I’m pleased to have joined AMP at this important time, where helping our customers to invest and plan for the future has never been more important.
“Our business has had a stronger first half financially, we have demonstrated our commitment to deliver our strategic priorities of reshaping and simplifying the business and focusing AMP Capital on private markets.
“We are starting to see some positive signs of growth and innovation, particularly in our bank and platforms businesses where we are introducing new services that our clients want.
“Our teams in AMP Capital have stood strong for clients during a period of change. We have continued to fund raise in infrastructure debt and to deploy capital and realise returns on assets for clients in infrastructure equity and real estate.
“Getting our demerger done will be a core priority. We’ve set out a clear timeline to establish and separate the AMP Capital Private Markets business this year, and complete the demerger in 1H 22,” Ms George said in Thursday’s statement.
