AMP Profit Rises But Market Conditions Dent Wealth Management Arm

   By Robb M. Stewart 
 

MELBOURNE, Australia--AMP Ltd. (AMP.AU) notched up a slightly higher half-year profit as strength in its capital, banking and New Zealand operations struggled to offset higher wealth-protection losses and challenging investment-market conditions.

Net profit rose 3.2% to 523 million Australian dollars (US$400 million) in the six months through June from A$507 million in the same period the year before, the company said Thursday.

Stripping out the impact of market volatility, accounting mismatches and other items, the company said its underlying earnings for the period fell by 10% to A$513 million. Revenue for the period was 29% lower at A$6.1 billion, compared with A$8.6 billion last year.

Still, the Australian wealth manager said it was holding its interim dividend steady at A$0.14 a share.

Australian wealth management net cash flows were A$582 million, down sharply from A1.15 billion the year before. Operating earnings for the division, the company's biggest earner, were down 6% on-year at A$195 million, which AMP said was driven by challenging investment-market conditions.

The Australian wealth protection unit recorded a drop in operating earnings to A$47 million in the half year from A$99 million previously, mainly due to the cost of insurance claims for the period.

"To address performance in the insurance business AMP is strengthening income protection assumptions, repricing, continuing the transformation of claims management and accelerating our capital management initiatives," Chief Executive Craig Meller said.

Operating earnings for the AMP Capital division were up by 15% to A$83 million thanks to growth in fee income over the period and the company's international expansion helping add to the asset mix, it said. AMP Bank recorded an 18% increase in operating earnings to A$59 million, aided by an expanded net interest margin and above-market loan-book growth. In New Zealand, the company said its earnings were up 2% due to an improved profit margin.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

August 17, 2016 18:30 ET (22:30 GMT)

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