AMP has slashed its final dividend to 4 cents a share in the wake of the worst year in its financial history for more than a decade as the toll of the disclosures from the Hayne Royal Commission hit home.
The 4 cents a share payout follows a group net profit for the year of just $28 million against $848 million for 2017.
AMP will pay a total of 14 cents a share for 2018, just under half the 29 cents a share paid for 2017 and all due to the bullish 10 cents interim paid last year.
AMP reported a massive turnaround and losses for the six months to December.
The company said interim profit to June 30 last year was $115 million, down from $445 million.
AMP said the 2018 results “include a provision of $430 million (post-tax) for potential advice remediation, inclusive of program costs, in relation to ASIC reports 499 and 515, which require an industry-wide ‘look back’ of advice provided from 1 July 2008 and 1 January 2009, respectively.”
The company said its 2018 underlying profit of $680 million was down 35% or $360 million from $1,040 million in 2017.
“This decrease largely reflects the impact of businesses subject to sale, with the operating earnings of retained businesses marginally weaker than in 2017, driven by lower earnings for Australian wealth management (-7%), offset by growth in AMP Capital (+7%) and AMP Bank (+6%).
“Australian wealth management earnings of $363 million declined 7% from 2017, driven by higher margin compression from MySuper repricing in Q4 2018, lower revenues from weaker investment markets and impairments to the carrying value of client registers in second half 2018.
“2018 operating loss of Australian and New Zealand wealth protection and mature businesses was $3 million, driven by capitalised losses and negative claims experience in second half 2018. Underlying return on equity decreased 4.7 percentage points to 9.6% in 2018 from 2017 reflecting reduced operating earnings in the Australian wealth protection business. AMP’s total assets under management (AUM) and administration were $258 billion at 31 December 2018 (2017: $257 billion,” AMP said in its results released Thursday morning.
AMP said it is considering the various matters raised in the (Royal) Commissioner’s final report.