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As the market players know, the global economy witnessed the negative impacts mainly due to the COVID-19 outbreak. Notably, announcements were made with respect to the lockdowns which impacted the operations of several companies. However, there are companies which can now perform in a better way. This company belongs to the financial sector. Also, it has maintained the robust capital position which could help it moving forward. The stock price of this company encountered a rise of ~14.9% in 1 month. Notably, over the past 3 months, it increased by 9.82%.
AMP Limited
Highlights
- The company has maintained a strong capital position through the transformation program.
- The company’s Board has decided to maintain conservative approach for the capital management as well as dividend. It has decided to not declare interim 2021 dividend.
- The divestment of equity interest in Resolution Life Australasia will strengthen the company’s available capital by around A$459 million.
- The company stated that A$169 million cumulative savings have been delivered since FY 2019. Notably, AMP happens to be on-track to deliver A$300 Mn of the annual run-rate cost savings by FY 2022 timeframe.
AMP Ltd (NZX: AMP) is involved in the business of wealth management. The company has a growing retail banking business as well as an expanding international investment management business.
H1FY21 Results Performance (For the Period Ended 30 June 2021)
- AMP has reported an increase in underlying NPAT to A$181 million from A$115 million in H1FY20 driven by higher investment income, as well as strong cost performance and higher earnings in AMP Bank.
- Statutory NPAT stood at A$146 million compared to A$203 million in H1FY20.
- Investment income stood at A$57 million, mainly from Group Office, up by A$48 million over H1FY20, supported by improved returns on the group’s cash investments, increased earnings from China Life Pension Company (CLPC), which also includes the first cash dividend, and the contributions from Resolution Life Australasia.
- New Zealand Wealth Management (or NZWM) witnessed earnings growth and its H1 FY 2021 NPAT stood at A$20 million, reflecting a rise of A$2 Mn, implying robust investment markets as well as tight cost control, offsetting the effect of the margin compression as a result of product repricing.
Source: EODHD/Others
Also Read: AMP (NZX:AMP): Is it a dividend-paying stock?
Q3FY21 Update
AUM of Australian wealth management (AWM) remained steady at A$131.2 billion driven by better investment markets that offset the net cash outflows. AWM net cash outflows improved to A$1.4 billion from net cash outflows of A$1.8 billion in Q3FY20.
North AUM also grew by A$1.7 billion to A$58.6 billion aided by higher net cashflows of A$1.0 billion after considering cash inflows of A$333 million from external financial advisers. The total loan book of AMP Bank witnessed an increase of A$0.3 billion to A$21.3 billion. This was led by the growth in residential owner-occupied loans in the highly competitive market.
Also Read: AMP (NZX:AMP): Q3 2021 AUM and cashflows update
Declared Divestment of Equity Interest in Resolution Life Australasia
As per the press release dated 3 November 2021, the company has agreed divestment of its 19.13% equity stake in Resolution Life Australasia to Resolution Life Group for a value of A$524 million.
This divestment will lead to the company’s exit from its former life insurance and mature business, AMP Life, which it unloaded to Resolution Life in 2020 for the total consideration amounting to A$3 Bn including the equity interest in RLA.
The divestment is likely to finish in 1H FY 2022, and it is subject to regulatory approvals in Australia as well as in New Zealand.
Please Read: AMP (NZX:AMP) sells off equity interest in Resolution Life Australasia
Stock Information
AMP is witnessing certain positive signs of growth and innovation, mainly in its bank and platforms businesses where it is launching new services for its clients.
Importantly, its plan is on track to deliver A$300 million of annual run-rate cost savings by FY22. Further, the board follows a conservative method of capital management to assist the transformation of the business.
The divestment of equity interest in Resolution Life Australasia will fortify the company’s available capital by around A$459 million. This will assist the company in providing additional flexibility ahead of the planned demerger of AMP Capital’s Private Markets business in 1H FY 2022. The company would be providing an update on the capital position at Investor Day on 30th November 2021.
AMP is sustaining its investments towards the transformation and growth of its wealth management and bank businesses. Further, it remains focused on providing capital to aid the growth of the Private Markets businesses and to defend the Real Estate business.
On 5th November 2021, the stock price of AMP Limited ended at NZ$1.230 per share.
