Australian wealth manager AMP has forecast a 96% plunge in its full-year profit in the wake of a fee scandal.
For calendar year 2018, the firm expects net profit attributable to shareholders of A$30m ($21.5m). In 2017, the firm’s net profit stood at A$848m.
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Underlying profit is expected to be around A$680m for 2018. This marks a 35% slump compared to the 2017 figure of $A1.04bn.
The firm also announced an additional pre-tax charge of A$200m in 2018 for advice remediation.
These include A$186m in programme running costs and A$14m in customer compensation.
Besides, it plans to trim the final dividend to 4 cents per share from 14.5 cents a year earlier.
“Recognising the 2H 18 performance of the business, the related capital impacts and uncertainties in the operating environment, the Board anticipates declaring a final dividend of 4 cents per share,” the firm said in a statement.
AMP also predicted a grim outlook for FY2019, saying that its earnings for the year will be affected by external market conditions and the regulatory environment.
AMP was recently under the scanner after revelation at the banking royal commission that it charged customers for services they did not receive. Moreover, it was accused of misleading regulators.
The firm’s CEO Craig Meller and chairman Catherine Brenner stepped down from their positions soon after the scandal.
