Shares in wealth manager AMP fell to new lows yesterday for the embattled wealth manager. The latest selling came on news that one of Australia’s largest investment houses, the Australian Foundation Investment Company (AFIC), has sold its stake in the company.
The broker calls AMP's earnings result "fairly sound" with strong performances in other businesses offsetting pressures in wealth management. The focus was on the probable sale of Life at a rebased price, a $650m equity raise that will be some -15% dilutive and $300m of targeted cost-cuts by FY22.
The sale of the company's life business is unlikely to proceed on current terms because of the challenges in meeting the Reserve Bank of New Zealand's criteria. Credit Suisse notes this allows the buyer the opportunity to review its offer and potentially lower the purchase price by over -$1bn.