- Australian wealth management net cash outflows of A$1.8 billion, including A$538 million of regular pension payments, reflected expected continued weakness in inflows and higheroutflows in the post-Royal Commission environment.
- AMP Capital net external cash outflows of A$20 million reflected quarter-end liquidity management by China Life AMP Asset Management investors and fixed income redemptions.
- AMP Bank increased deposits by A$218 million, with the most growth in retail deposits, while the total loan book also grew by A$127 million to A$20.1 billion.
- Solid increases in assets under management (AUM) across Australian wealth management (5 per cent), New Zealand wealth management (7 per cent) and AMP Capital (4 per cent) during the first quarter, driven by stronger investment markets.
AMP Chief Executive Francesco De Ferrari said:
“Our focus during the first quarter has been on accelerating change within AMP including establishing a new leadership team, progressing the remediation program and separating our life insurance businesses, and sharpening our offers to clients.
“Stronger investment markets delivered growth in assets under management in Australian and New Zealand wealth management and at AMP Capital.
“Cashflows in Australian wealth management continue to be challenged given the post-Royal Commission environment. AMP Bank is performing well, with strong retail deposit growth and a modest increase in lending, and AMP Capital continued its strength in real assets.
“We remain focused on transforming our business model in Australian wealth management to compete more effectively. Actions we’ve already taken to improve outcomes for customers include fee reductions on our MyNorth products, which builds on the MySuper fee cuts we delivered to clients in 2018. We’ll continue to modernise our products to put AMP in a position where we can win in the market.”
Commentary
Australian wealth management
- Australian wealth management AUM increased 5 per cent to A$129.3 billion, with positive investment markets offsetting weaker cash inflows.
- Net cash outflows of A$1.8 billion compared to A$200 million in net cash outflows in Q1 18.
- Cash inflows of A$4.69 billion, A$1.3 billion lower than Q1 18, reflected reduced member contributions and slower inflows on North platform.
- Cash outflows of A$6.46 billion, up from A$6.14 billion in Q1 18, included A$538 million in regular pension payments made to AMP’s clients.
AMP Capital
- AMP Capital AUM increased 4 per cent to A$194.6 billion primarily due to stronger investment markets.
- Net external cash outflows of A$20 million reflected quarter-end liquidity management by China Life AMP Asset Management investors and fixed income redemptions.
- Net inflows in infrastructure strategies continue, supported by strong client demand and solid transaction pipeline.
- During Q1 19, AMP Capital confirmed the sale of its 50 per cent shareholding in the management companies of Singapore-listed AIMS AMP Capital Industrial REIT (AA REIT) to joint venture partner AIMS Financial Group. As a result of this share sale, AMP Capital’s external AUM reduced by A$765 million and AMP Capital will recognise a gain on sale in 2019. As part of the transaction, AMP Capital has also agreed to sell its 10.26 per cent principal stake in AA REIT units to AIMS Financial Group, which will settle in 2H 19.
AMP Bank
- AMP’s total loan book grew by A$127 million to A$20.1 billion during Q1 19, supported by continued growth from the mortgage broker channel.
- The deposit book increased by A$218 million in Q1 19 to A$13.5 billion relative to Q4 18. AMP’s strong growth in retail deposits has been partially offset by lower super and platform deposits.
New Zealand wealth management
- New Zealand wealth management AUM increased 7 per cent to A$11.9 billion for the period driven primarily by positive market performance and net cash inflows of A$37 million into KiwiSaver.
- New Zealand wealth management experienced net cash outflows of A$52 million compared to A$53 million in net cash inflows in Q1 18.
