AMP’s home loan book grows by $2 billion

Acquisition of Nano's mortgages boosts FY22 results

AMP’s home loan book grows by $2 billion

AMP Bank’s residential mortgage book grew by $2 billion while improving its net interest margin, the company revealed in its FY22 results.

The bank, which is part of AMP Limited, said its loan book had maintained strong credit quality, with mortgage book growth totalling 1.5x system, excluding the acquisition of Nano’s loan book.

AMP’s overall FY22 results, announced on Thursday, February 16, included net profit after tax of $184 million, compared to $280 million in FY21.

The company said the NPAT (underlying) result predominantly reflected investment market volatility on assets under management (AUM), strategic repricing in wealth management businesses and net interest margin (NIM) compression in AMP Bank.

These factors were partially offset by continued delivery on cost reduction, AMP said.

NPAT (statutory) increased to $387 million (FY21, $252 million statutory loss), supported by the gain on sale of the infrastructure debt platform in FY22. This was partly offset by impairments announced in January 2023 and costs to separate the AMP Capital businesses.

AMP chief executive Alexis George (pictured above) said AMP’s profit for the year reflected the challenging economic environment it faced, as well as strategic decisions to reprice the company’s offers in Master Trust and Platforms to “deliver both highly competitive and attractive offers”.

“We have made excellent progress on the delivery of the strategy that we announced in November 2021, setting us on the path to a new AMP,” George said.

“Our strategic focus has been on simplifying our operations and repositioning AMP as a leading wealth management and banking business in Australia and New Zealand. We are now focused on driving growth in our core businesses and exploring new business opportunities for longer term growth.”

George said AMP had completed both the sale of the infrastructure debt platform and its international infrastructure equity business.

“We continue to work towards completion of the sale of the real estate and domestic infrastructure equity business. The completion of these transactions enables AMP to become a simplified and more customer-focused business.”

Off the back of those transactions, AMP has committed to returning $1.1bn of capital to shareholders, said George.

“I am pleased that we are able to deliver an FY22 final dividend to shareholders of 2.5 cents per share as part of that, in addition to the $350 million on-market share buyback that we currently have underway.”

George said the company’s key growth businesses – AMP Bank and Platforms – were starting to benefit from “the investments we are making in those businesses”.

“I am proud of the significant progress we have made in 2022. We have made several new appointments to the executive and management team during the year to position the business to deliver on our strategy, and drive a culture of accountability and inclusion.

“Strategically and operationally, we have a clear path forward for AMP as a leader in wealth management and banking, building on our purpose – helping people create their tomorrow.”

AMP Bank FY22 results a glance:

  • Residential mortgage book grew by $2bn
  • Growth of 1.8x system, (1.5x excluding the acquisition of Nano), underpinned by ongoing service improvements and the acquisition of the Nano residential mortgage book, adding approximately $400 million in loans
  • Mortgage book quality was maintained with 67% of customers being owner-occupied, and an average book LVR of 66%
  • 41% of AMP Bank customers ahead on their mortgage repayments schedule by more than three months
  • NPAT (underlying) of $103 million (FY 21: $153 million) reflects the benefit of the one-off, COVID related, loan impairment release in FY21 not repeated in FY22, and a more competitive funding and lending environment
  • NIM of 1.38% (FY 21: 1.62%), primarily driven by mortgage margin compression and asset mix changes. NIM improved during 2H 22, due to higher interest rate environment and focus on carefully controlling deposit and funding costs