"The performance of our underlying businesses continues to improve," CEO says
AMP has announced its financial results for the first half of 2023. The underlying net profit after tax (NPAT) for the period was $112 million, in line with the results from the first half of 2022.
The business unit performance for AMP includes several notable achievements. AMP Bank reported an underlying NPAT of $57 million, representing a 23.9% increase compared to the first half of 2022. This growth was driven by disciplined mortgage growth in a competitive environment, AMP said.
The Platforms division also saw a positive performance, with an underlying NPAT of $44 million, showing a 25.7% increase compared to the same period last year. The Advice division, although still incurring a loss, improved its underlying NPAT by $5 million to a loss of $25 million.
The overall statutory NPAT for AMP in the first half of 2023 was $261 million, down from $469 million in the first half of 2022. The decrease can be attributed to the gain from the sale of various businesses in the first half of 2022, including the International Infrastructure Equity business and the Real Estate and Domestic Infrastructure Equity business, and SuperConcepts, AMP said.
AMP has also focused on cost management and capital management. Controllable costs for the first half of 2023 were $362 million, in line with the first half of 2022, despite inflation and stranded costs from asset sales. The company has announced a business simplification program aimed at reducing the cost base by $120 million by the end of the financial year 2025. This program will require an investment of $120-$150 million over the next two years.
In terms of capital management, AMP has returned $610 million to shareholders since August 2022, with an additional $140 million expected to be returned by the end of October 2023 through an interim dividend and remaining on-market buyback. The company has also paid down $302 million of corporate debt in July 2023. However, due to the uncertainty surrounding the Financial Adviser Class Action judgement, AMP has temporarily paused the tranche three capital return. An update on this will be provided no later than Dec. 31, AMP said.
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“The performance of our underlying businesses continues to improve, with AMP Bank achieving disciplined mortgage growth in a competitive environment, the North platform significantly increasing inflows from independent financial advisers, Advice further reducing costs, and Master Trust operating more efficiently and delivering strong investment returns for members,” said Alexis George (pictured above), CEO of AMP.
George also emphasised the company's commitment to reducing costs and improving efficiency, with a target of delivering $120 million in run-rate controllable cost savings by the end of the financial year 2025.
The operating business unit results for AMP showcase positive developments. AMP Bank experienced a 23.9% increase in underlying NPAT, driven by disciplined loan growth and strong broker relationships. The Platforms division saw a 25.7% increase in underlying NPAT, primarily due to improved investment outcomes. The Master Trust division reported an underlying NPAT increase of 7.7%, supported by cost reductions and a strong member value proposition. The Advice division continued its transformation, reducing its underlying NPAT loss by $5 million compared to the first half of 2022. The New Zealand Wealth Management division delivered a stable result, with an underlying NPAT of $17 million.
“We have significantly reduced the size and complexity of AMP’s business, whilst continuing to resolve legacy issues,” George said. “The changes we have made are allowing us to focus on driving performance and strategic investment in our growth businesses, with our eyes firmly on the future.”
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