AMP seeks to reassure investors on outflows

Beleaguered AMP’s Australian wealth business suffered a further $1.95bn of net outflows in the September quarter.

AMP CEO Francesco De Ferrari. Picture: Britta Campion

AMP’s Australian wealth management business suffered a further $1.95bn of net outflows in the September quarter, bringing its year-to-date outflows to $6.35bn.

However, the beleaguered wealth manager sought to reassure shareholders by saying there were underlying signs of improvement in the amount of funds exiting the business.

Over the three months to September 30, $6bn flowed into the wealth management operation but it wasn’t enough to offset the $8bn that flowed out. The wealth manager’s inflows over the period were $1.1bn lower than the previous year, while the outflows were also $1bn lower than at the same time last year.

Outflows over the quarter included regular pension payments of $453m and $692m super early access payments, AMP told the market on Thursday.

Despite the outflows, improving investment markets helped it lift its assets under management to $121.4bn over the quarter, 3 per cent higher than at June 30. But its assets under management are well below the $133.2bn they stood at a year ago.

AMP warned investors to expect further outflows of approximately $450m in the fourth quarter after it lost a corporate super mandate.

AMP Capital also suffered net outflows in the quarter, to the tune of $1.1bn, which it said reflected the run-off of legacy business from the sale of AMP Life as well as redemptions from public markets products.

Amp Capital’s assets under management fell 0.4 per cent over the three months to $189.2bn. A year ago the division’s assets under management sat at $202.2bn.

Its New Zealand wealth management business, meanwhile, lifted its assets by 1.2 per cent to $11.8bn and saw net cash outflows of $13m.

AMP Bank’s loan book fell $303m to $20.6bn, which it said reflected highly competitive market conditions and the economic impact of COVID-19. Deposits increased by $52m to $17bn over the period.

AMP chief executive Francesco De Ferrari said the business had performed resiliently through the COVID-19 pandemic and a period of internal change in the third quarter.

“Our people have continued to face into the disruption, remaining focused on supporting our clients through programs such as the early release of super, and by providing financial advice to those who need it,” he said.

A review of AMP’s assets and businesses, announced last month, was progressing and would not delay the business’ three-year strategy currently underway, Mr De Ferrari said.

AMP has faced multiple scandals in recent months, including the promotion and subsequent resignation of AMP Capital chief executive Boe Pahari following intense criticism of how the wealth manager handled sexual harassment allegations made against him in 2017.

Mr Pahari was elevated to the top job at AMP Capital on July 1 but resigned from the role in late August. AMP chairman David Murray stepped down at the same time.

Earlier that same month, AMP Australia chief executive Alex Wade offered his resignation after allegations of inappropriate behaviour, including that he sent explicit photos to colleagues.