AMP promises $1.1bn worth of capital return to shareholders
AMP will return $1.1 billion of capital to shareholders, comprising $350 million via an on-market share buyback to commence immediately followed by a further $750 million of capital returns in the 2023 financial year.
The move was announced as part of AMP’s underwhelming first-half result, reporting losses across most of its business units with AMP Bank falling by 45.2%, Australian Wealth Management down by 20% and New Zealand Wealth Management down 10.5%.
AMP Capital continuing operations was the only unit reporting a positive result, up 62.5%.
This resulted in an underlying net profit after tax (NPAT) of $117 million, which included the impact of the previously announced North and Master Trust strategic repricing in 2021 and the release of AMP Bank credit loss provision in the first half of 2021.
The advice segment of the business delivered a 1H 22 NPAT (underlying) loss of $30 million, improved from a loss of $85 million in 1H 21, benefitting from the sale of the employed advice business and 1H 21 impairments not repeated in 1H 22.
Advice revenue was $7 million higher at $30 million, with revenue growth in portfolio of equity investments in 1H 22 and impairments in 1H 21 not repeated, offset by the impact of the employed advice sale in late 2021.
AMP chief executive, Alexis George, said: “We have built strong momentum on the transformation of AMP into a simpler and more efficient organisation which is well placed to grow. The agreed sales of the Collimate Capital businesses are on track to complete in the second half of the year. Post completion there will be a renewed focus for AMP as a leading wealth management and banking business in Australia and New Zealand.
“The strength of our balance sheet and capital position has enabled us to announce a return of capital to shareholders of A$1.1 billion. This will include a A$350 million on-market share buyback, to commence immediately, with a further A$750 million of capital returns planned in FY 23, subject to regulatory and shareholder approval. We’re pleased to be able to deliver on this commitment to our shareholders.
“While our profit has declined on 1H 21 due to a more challenging environment, it is also a reflection of the deliberate actions we took to reprice our offers in Master Trust and Platforms to continue delivering competitive offers to customers and set AMP up for longer-term success. Despite the decline in investment markets and anticipated margin compression, we delivered disciplined cost savings that have supported our earnings.”
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