Slimmed-down AMP to accelerate growth as profits dive, dividends cut

Wealth manager AMP is set to focus on its banking, superannuation and platforms businesses after further consolidation.

AMP chief executive Alexis George. Picture: Britta Campion

Investors have given AMP a drubbing after the mixed financial services giant warned it was focusing on growth and dialling back returns amid fierce competition.

The wealth and banking group slashed its final dividend as statutory profits for its financial year dived 43 per cent to $150m, with AMP squeezed by the cost of selling its advice business.

The full-year profit tumble followed higher returns last year after AMP exited its AMP Capital and SuperConcepts businesses.

AMP said its underlying profits were up 15.1 per cent to $236m.

But $87m in remediation, litigation, and simplification costs depressed the result.

AMP booked a $36m loss from selling its advice business in a deal which left it with a 30 per cent stake, with the remainder sold to Entireti.

AMP chief executive Alexis George said the group was now focused on its wealth, superannuation and banking arms.

She said no acquisitions to bulk up operations were planned.

Ms George said AMP was now finished dialling down its operations, aside from the mooted sale of a property business in the US which she said would be delayed until commercial asset values ­recovered.

“The portfolio we’ve got now is the portfolio where each of those businesses has growth strategies,” she said.

“With this result we’re definitely reorienting towards growth.”

Ms George said AMP had greatly simplified its operations over the last three years, noting she had attempted to steer the group to “where it could grow”.

But AMP’s performance across its divisions was mixed, with rising returns from its superannuation and platforms business matched by a continued decline in the performance of AMP Bank.

Returns from platforms reached $107m, up 18.9 per cent.  Superannuation and investments returns were up 26.4 per cent.

But AMP Bank profits fell 22.6 per cent to $72m.

Returns from the bank have collapsed by more than $31m in three years.

Ms George said AMP Bank was facing a tough retail banking market, but said the business was focused on margins and was seeing “modest growth” in the second half of the financial year.

“Retail banking as a whole, whether you’re a major or a minor, has been particularly difficult over the last couple of years,” she said.

AMP declared a 1c final dividend, 20 per cent franked.

That brought its total dividend for the year to 3c – down from 4.5c a year earlier.

The group also flagged plans to target a 2c dividend payout over 2025, noting the need “to manage the balance sheet through the cycle”.

This sparked a sell-down in AMP shares, which fell 14.86 per cent to close at $1.49.

AMP’s share price has run up by 64.55 per cent over the last 12 months.

Citi analyst Nigel Pittaway said AMP’s results were “largely in line with consensus”.

However, he warned that the group was faced with a rising costs bill.

Barrenjoey analyst Andrew Adams cautioned AMP was positioned for an earnings downgrade after missing consensus estimates for its full-year earnings on ­Friday.

In a note to investors Mr Adams said AMP had delivered a “soft” dividend and an outlook for lower earnings in 2025 “as AMP shifts to growth phase”.