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AMP Limited provides Q3 18 cashflows update
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25 October 2018
  • Challenges in Australian wealth management (AWM) partially offset by a continuing resilient performance from AMP Capital and AMP Bank in a difficult environment.
  • AWM net cash outflow of A$1.5 billion reflects continued weakness in inflows and elevated outflows.
  • AWM assets under management increased A$579 million during Q3 18 to A$132.6 billion.
  • AMP Capital external net cash inflows of A$521 million driven by ongoing strength in real assets notably infrastructure investment in Europe and the US.
  • AMP Bank’s total loan book steady at around A$20 billion at the end of Q3 18.
  • Australian wealth protection recorded negative experience of A$22 million during the quarter reflecting challenges facing the sector.
  • AMP has today agreed to sell Australian and New Zealand wealth protection and mature to Resolution Life, which assumes risk and profits of the businesses from 1 July 2018 subject to risk-sharing arrangements.

AMP Acting Chief Executive Mike Wilkins said:

“It was a testing quarter, particularly in Australian wealth management and Australian wealth protection, although AMP Capital and AMP Bank again demonstrated ongoing resilience.

“AMP Capital’s solid performance continues to reflect its strength in real assets, with a number of significant infrastructure debt and equity transactions driving net external cashflows. AMP Bank’s performance remains steady, with its total loan book at A$20.1 billion.

“We remain focused on our 2H priorities. We are pleased to have completed our portfolio review and have made progress on establishing our remediation program for financial advice.”

AMP’s full year 2018 results will be announced to the market on 14 February 2019, with the record date for the full year dividend on 28 February 2019.

Australian wealth management

  • Net cash outflows of A$1.5 billion in Q3 18 increased from Q3 17 net cash outflows of A$243 million due to weaker inflows while outflows remained at elevated levels in part following AMP’s appearances at the Royal Commission.
  • Total Australian wealth management AUM increased A$579 million from Q2 18 to A$132.6 billion, with positive investment markets offsetting weaker cashflow.
  • AMP’s award-winning wrap platform, North, reported a net cashflow of A$881 million in Q3 18, down from A$1.3 billion in Q3 17.

AMP Capital

  • AMP Capital external net cash inflows were A$521 million in Q3 18, down from net cashflows of A$616 million in Q3 17.
  • External net flows were driven by equity raisings for AMP Capital’s flagship real estate funds and infrastructure debt and equity transactions in the US and Europe including an equity investment in Invenergy’s natural gas-fired power generation facilities across the US, Canada and Mexico.
  • AUM increased from A$190.5 billion at Q2 18 to A$192.4 billion in Q3 18, primarily due to infrastructure transactions and the impact from stronger investment markets.
  • AMP Capital’s share of China Life AMP Asset Management, the joint venture with China Life, reported A$78 million in net outflows for the quarter reflecting the transitional phase for new regulatory reforms and challenging equity market conditions in China.

AMP Bank

  • AMP’s total loan book moderated in Q3 18 to A$20.1 billion from A$20.2 billion in Q2 18 reflecting the slowdown in credit growth, a period of conservative liquidity management and increased flows to the non-bank sector.
  • Deposit book increased by A$773 million in Q3 18 to A$13.5 billion.

Australian wealth protection

  • Claims experience was negative during the quarter (A$22 million) in what remains a challenging environment for the wealth protection sector.
  • New business continued to be subdued in Q3 18.
  • Retail API increased predominantly due to age and CPI increases to premiums while Group API dropped due to the departure of a large group plan (previously flagged to the market) on 1 July 2018.
  • AMP has today agreed to sell Australian and New Zealand wealth protection and mature to Resolution Life, which assumes risk and profits of the businesses from 1 July 2018 subject to risk-sharing arrangements.

New Zealand financial services

  • New Zealand financial services’ net cashflows increased 7 per cent to A$81 million in Q3 18 from A$76 million in Q3 17.
  • KiwiSaver net cashflows in Q3 18 were A$85 million, down from A$107 million in Q3 17, due to increased competition and higher retirement withdrawals.

Australian mature

  • Australian mature net cash outflows in Q3 18 were A$431 million, compared to A$356 million in Q3 17, with run off of the book progressing as projected.
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Catherine Woods
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Mark Roberts
+61 (0) 466 328 581