AMP profit crumbles amid royal commission scandals, life insurance sale
Wealth management giant AMP’s full-year profit has crumbled by 97 per cent, as it faces the fallout from a range of scandals exposed by the royal commission and shrinks due to the sale of its life insurance business.
The statutory net-profit after tax for 2018 was just $28 million, down from $848 million the previous year.
The final dividend has also been slashed to 4 cents from 14.5 cents this time last year.
AMP flagged the profit slump with investors late in January, so the result comes as no surprise — AMP shares were pummelled on the day the profit downgrade was announced, but recovered some ground on softer-than-expected recommendations from the banking royal commission.
The company said its underlying earnings, which strip out a lot of one-off costs and gains, were down a more moderate 35 per cent to $680 million.
“This decrease largely reflects the impact of businesses subject to sale, with the operating earnings of retained businesses marginally weaker than in 2017,” the company noted.
AMP said wealth management was the major drag, with earnings down 7 per cent as many customers abandoned the company in the wake of royal commission fees-for-no-service revelations, while AMP Capital (+7 per cent) and AMP Bank (+6 per cent) recorded growth.
More to come.