AMP Limited’s Shares Tumbled Over 3% After Providing Confirmation Of Advice Redemption Program

  • Nov 28, 2018 AEDT
  • Team Kalkine
AMP Limited’s Shares Tumbled Over 3% After Providing Confirmation Of Advice Redemption Program

On 28 November 2018, AMP Limited (ASX: AMP) made an announcement on ASX, stating that it confirms the AUD$415 million pre-tax (AUS$290 million post-tax) additional advice remediation provision recognized in its first half 2018 financial results. Following the release of this news, the share price of AMP decreased by 3.292 percent as on 28 November 2018.

AMP also confirmed that AUD$210 million (pre-tax) of program running costs was not provisioned in the total program estimate as estimates were insufficiently reliable to meet accounting definition for provision. AMP also did not provision future customer lost earnings worth $45 million. As per the company’s announcement, these future lost earnings will be paid as accrued. As of now, the bank has not made any allowance for a contribution from potential recovery options.

In the announcement, AMP also clarified that the figure of A$1.185 Bn which was earlier mentioned in the Banking Royal Commission was an early estimate of the total program costs. Now the total program cost is estimated at A$778 million. AMP has disclosed that the earlier estimate of AUD$1.185 billion was based on a 9-year timeframe for remediation that was rejected by the management and the Board.  In the announcement, AMP also disclosed that it is in the process of investigating the provision of general advice to corporate super plans which is mainly related to small to medium corporate super plans.

In the recently released September quarter report, AMP disclosed that the total Australian wealth management AUM increased by A$579 Mn from the second quarter of 2018 to A$132.6 Bn, with positive investment markets offsetting weaker cash flow. Further, AMP Capital external net cash inflows were A$521 million in September quarter of 2018 which are less than the net cash flows of A$616 million in September quarter of 2017.  AMP Capital’s share of China Life AMP Asset Management reported A$78mn in net outflows for the September quarter which reflects the transitional phase for new regulatory reforms and challenging equity market conditions in China.

AMP’s total loan book decreased from A$20.2bn in the second quarter of FY 18 to $20.1 in the third quarter of FY 2018 which reflects a slowdown in credit growth, a period of conservative liquidity management and increased flows to the non-bank sector. New Zealand financial services’ net cash flows increased by 7% to A$81 million in the September 2018 quarter as compared to the previous corresponding period.

As per the company’s recent announcement, AMP is planning to redeem all of its $325 million AMP Subordinated Notes 2 on their first optional Redemption Date of 18 December 2018. As per the announcement, the holders who are on the register on 10 December 2018 will be entitled to receive the face value of A$100 per Note plus the final interest payment of A$1.1397 per Note.

In the last six months, the share price of AMP decreased by 38.01 percent as on 27 November 2018. AMP’s shares traded at $2.350 with a market capitalization of circa $7.14 billion as on 28 November 2018 (AEST 4:00 PM).


This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.



All pictures are copyright to their respective owner(s) does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK