Shares in AMP fell more than 5% on Thursday after the wealth manager revealed another weak quarter with more than two billion dollars in investor outflows in the three months to September.
The shares closed at $1.36, down 5.5% on the day.
While the company’s wealth management arm saw total assets increase by 2% to $122.1 billion, outflows continued due to a loss of corporate super mandates and payments to clients accessing their superannuation early in the COVID-19 crisis, AMP said in a trading update to the ASX.
Analysts blamed the $2.1 billion outflow on the bad publicity linked to the sexual harassment scandal involving AMP executive Boe Pahari who remains at AMP Capital, plus the board changes the scandal saw with chairman David Murray exiting.
Redemptions by super funds and other institutional clients saw AMP Capital’s assets shrink to $189.8 billion in the three months to September 30.
While AWM reported net cash outflows of $1.95 billion during the latest quarter, this is steady from the same period last year.
AMP claimed that there were signs of underlying improvements if the $692 million of early release of super payments were ignored. The early release payments were part of the federal government’s support package for households to weather the COVID-19 pandemic.
AMP’s North wealth platform reported continued growth. This business received $818 million in net cash inflows, including $196 million from external financial advisers.
But AMP bank had a poor quarter – the total loan book value fell $303 million to $20.6 billion at September 30. AMP blamed that on highly competitive market conditions and the economic impact of COVID-19 for the slide.
AMP chief executive Mr De Ferrari said the results showed “underlying improvement”, with its online fund management platform, North, seeing $818 million in net inflows over the quarter and wealth assets growing by 0.3 per cent to $121.4 billion.
“Our business has performed resiliently through the challenges of COVID-19 and a period of internal change in the third quarter,” Mr De Ferrari said in Thursday’s statement to the ASX.
AMP is looking at whether it should remain in its current state, or start sell off (or spinning off) assets such as the AMP Bank and AMP Capital.
The quarterly update is negative for both with increasing competition emerging in financial services, especially in banking and home lending where AMP Bank is under resourced.
