- AMP (AMP) announces a fall in half-yearly profits of almost 25 per cent to $117 million for the first half of 2022 as a lower net interest margin impacted bank earnings
- With a major reduction in net cash outflows, however, AMP says it is in a strong capital position and, as such, commits to returning $1.1 billion to shareholders in the coming years
- CEO Alexis George says this will be in the form of a $350 million share buyback to commence immediately and another $750 million to be returned next financial year
- The AMP board has once again declined to declare an interim dividend, marking almost four years since the company’s last ordinary dividend payout
- Shares in AMP are down 3.43 per cent to $1.13 at 10:48 am AEST
Wealth manager AMP (AMP) has announced a fall in half-yearly profits of almost 25 per cent to $117 million for the first half of 2022 as a lower net interest margin impacted bank earnings.
The company said in its latest half-year report its net interest margin dipped to 1.32 per cent over the six months to the end of June compared to 1.62 per cent over the same period last year.
The ASX 200-lister contributed the margin pressure to a preference toward fixed loans from customers. With the Reserve Bank raising interest rates in both July and August, however, it’s likely margins for big banks will recover over the coming months.
Despite AMP’s profit drop and a 20 per cent fall in group revenue to $1.36 billion, the company said it reduced net cash outflows by almost 50 per cent to $1.9 billion over the first half of 2022 compared to $3.6 billion over the first half of 2021. This was supported by improved cash inflows from independent financial advisers on AMP’s North platform.
As such, AMP said a strong balance sheet and capital position meant the company was committing to return $1.1 billion to shareholders in the coming years.
AMP chief Alexis George said this would come in the form of a $350 million share buyback to commence immediately, subject to regulatory approval, with another $750 million of returns planned for FY23.
“We have built strong momentum on the transformation of AMP into a simpler and more efficient organisation which is well-placed to grow,” Ms George said.
She added today’s first-half results came against a “challenging” economic backdrop over the first half of the year.
“Despite the decline in investment markets, our business is well-positioned with a robust balance sheet that will help us to drive forward through a period of continued economic activity.”
The AMP board once again declared no interim dividend. This means aside from a 10-cent special dividend in 2020, AMP last declared a dividend in February 2019.
AMP had roughly $1.85 billion in cash and cash equivalents at the end of June.
Meanwhile, the AMP Wealth Management arm saw assets under management reduce to $126 billion compared to the $142 billion at the same time last year. AMP blamed negative investment market returns for the reduction.
Shares in AMP were down 3.43 per cent to $1.13 at 10:48 am AEST.