$2.3b impairment bill sours AMP result
AMP Limited has reported a net loss attributable to shareholders of $2.5 billion in its full year results announced to the Australian Securities Exchange (ASX) today.
The company reported that the loss was largely due to impairments taken in the first half of last year to address legacy issues.
Notwithstanding the loss, the board confirmed an increase in the chief executive, Francesco De Ferrari’s short-term incentive remuneration opportunity to 200% of his base salary.
It said the company’s underlying profit of $464 million down from $680 million in the previous corresponding period reflected the challenging environment in Australian wealth management, offset by strong earnings by AMP Capital and resilient performance by AMP Bank.
Discussing its wealth management strategy, the company said that approximately 440 advisers had exited the network during the reporting period but that improved adviser productivity meant average assets under management (AUM) per adviser had increased to $52 million.
The company also revealed that the majority of grandfathered commissions would be removed in the first half of the current financial year as part of the separation of AMP Life.
The commentary said that Australian wealth management continued to experience a challenging period of industry disruption but that the underlying business remained resilient with AUM increasing 9% to $134.5 billion, driven by stronger investment growth.
Commenting on the result, AMP chief executive, Francesco De Ferrari said 2019 had been a year of fundamental reset for the company.
“Amid the rest, AMP Capital had an outstanding year, delivering on its long-term global growth plan,” he said.
De Ferrari said that, as promised, AMP had prioritised client remediation and expected to have completed 80% of the program by the end of this year with completion in 2020.
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