AMP to Look at Capital Management After Swinging to Profit

   By Robb M. Stewart 
 

MELBOURNE, Australia--AMP Ltd. (AMP.AU) said it would consider what to do with excess capital after concluding a review of its Australian wealth-protection, New Zealand and mature businesses.

A review of the various businesses is underway, and the Australian financial services firm said Thursday it was in discussions with a number of unnamed interested parties. An update on what the company will opt to do with the assets is due by its annual shareholders meeting in May.

The prospect of a capital-management program follows a swing to a net profit of 848 million Australian dollars (US$670.4 million) in 2017 after being pitched to a A$344 million loss the year before by charges against its wealth-protection business.

Underlying earnings, which seek to normalize investment-market volatility and are the basis used by the company for determining dividend payments, more than doubled to A$1.04 billion from A$486 million on the back of a 24% rise in revenue to A$18.36 billion from A$14.8 billion, AMP said.

Over the year, the company stabilized its life-insurance business, stepped up international growth and met targets on reducing costs, Chief Executive Craig Meller said.

In August, AMP moved to further reduce the capital intensity of its Australian wealth-protection business in Australia with a series of reinsurance agreements it said would release a further A$500 million in capital from its AMP Life unit. That built on a reinsurance deal in 2016 with Germany's Munich Re AG aimed at stabilizing the life unit, which had struggled with escalating losses and deteriorating industry conditions.

The company said it was in a strong capital position with A$2.3 billion over minimum regulatory requirements.

For the financial year, the wealth-protection business swung to an operating profit of A$110 million from a year-earlier loss of A$415 million

Australian wealth management, the biggest driver of operating earnings, recorded operating earnings of A$391 million, a drop of 2.5% on 2016, while AMP Capital's earnings rose 8.3% to A$156 million. The AMP Bank unit increased earnings 17% to A$140 million, and operations in New Zealand saw a 0.8% slip to A$125 million.

AMP said it would maintain its final dividend at A$0.145 a share, for a full-year payout of A$0.29.

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

(END) Dow Jones Newswires

February 07, 2018 16:28 ET (21:28 GMT)

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