Australian wealth manager AMP full-year profit has plunged 97% year-on-year to A$28m ($19.9m) after revelations of embroilment in a fee scandal.
In 2017, the firm’s statutory profit stood at A$848m.
Go deeper with GlobalData
The firm’s underlying profit stood at A$680m for the 12 months to December 2018, a 35% slump from A$1.04bn in 2017.
The key driver of the decline was AMP’s Australian wealth management business.
The unit reported net cash outflows of A$3.97m in 2018, as against inflows of A$931m in the previous year.
Operating earnings at the unit dropped 7% to A$363m from A$391 last year.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAt AMP’s New Zealand wealth management arm, operating earnings dipped 2% to A$53m on a year-on-year basis.
The performance was said to be mainly due to the “reputational impact” of the royal commission.
AMP was recently grilled by the banking royal commission after revelations that it charged customers for services they did not receive and misled regulators.
AMP CEO Francesco De Ferrari said: “The Royal Commission has been a confronting but valuable experience for the financial services industry and has served as a catalyst for change at AMP. We have undertaken Board and leadership renewal, accelerated client remediation and sharpened our focus on delivering better value to customers including reducing fees on our MySuper products.”
Many of the firm’s senior-level executives, including CEO Craig Meller and chairman Catherine Brenner, stepped down from their roles following the commission.
Earlier this month, the firm appointed Alex Wade as its new wealth management boss as part of a broader management reshuffle.
This January, the wealth manager forecast a 96% decline in its full-year profit.
Some bright spots
Operating earnings at AMP Capital increased 7% to A$167m from A$156m.
The group attributed the rise in earnings at the division to stronger fee income and growth in external AUM.
The firm also reduced its final dividend to 4 cents from 14.5 cents a year ago.
De Ferrari said: “2018 has been a challenging year for AMP. Our core businesses have delivered resilient results, with continued growth in AMP Capital and AMP Bank offsetting the headwinds faced in Australian wealth management.
