AMP’s announced additional -$325m of impairments lowers its capital position by around -$220m, Citi estimates, but AMP has generated around $250m of capital from improved hybrid utilisation (convertible debt).
A key question for the broker is whether this will be sufficient to fund planned growth in infrastructure funds post its private capital division demerger. More will hopefully be revealed at tomorrow’s investor day.
Neutral (High Risk) and $1.25 target retained for now.
Target price is $1.25.Current Price is $1.02. Difference: $0.23 – (brackets indicate current price is over target). If AMP meets the Citi target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).