AMP provisions on BOLR as advice business remains in red
AMP Limited has announced a further improvement to its financial advice business performance in the first half but it still remains in the red.
At the same time, AMP has paused tranche three of its capital return in the face of provisioning $50 million in response to the Buyer of Last Resort (BOLR) class action loss.
Announcing its first half results to the Australian Securities Exchange (ASX), AMP said that underlying net profit after tax for the adv ice business was a loss of $25 million but that this represented a $5 million improvement on the same period last year.
The company announced an overall statutory net profit after tax (NPAT) of $261 million which it said predominantly reflected a nete gain of $209 million on the sale of the International Infrastructure Equity business and the Real Estate and Domestic Infrastructure Business and Super Concepts.
The company reported underlying earnings of 3.8 cents per share and declared an interim dividend of 2.5 cents per share 20% franked.
Commenting on the result, AMP chief executive, Alexis George said the performing of the firm’s underlying businesses continued to improve with AMP Bank achieving disciplined mortgage growth in a competitive market, the North platform significantly increasing inflows from independent financial advisers and advice further reducing costs.
I can’t believe AMP didn’t change their name once it was evident they were the scapegoats for the royal commission.
Meanwhile the worst performing, CBA were let off relatively untouched.
You must be joking
They left a ‘0’ off, it is $500m!!!!!
I watched the whole thing, did you? CBA by far the worst
Marco Polo I watched the vast majority, even caught the bit where Mr Hayne let out a sneaky fart so I think I am well positioned to comment
I knew the RC was a joke when he said that CBA had nothing to worry about in relation to how they treated Bank West business clients. That was a terrible abuse of power by CBA but Hayne had obviously been told to “look away” from the banks and focus on the financial planners. Incompetence or worse in my view.
Regardless of the class action, AMP should always have had large provisions in its financial statements for BOLR liabilities. It was never sustainable, and always bound to erode capital sooner or later. The fact this wasn’t done reflects badly on past AMP management, directors, and auditors.
If AMP were fair dinkum, they would exit advice. Their business model is a mess, with sole intention of handcuffing advisers to protect North and Sig Super. They will never be able to turn a profit on advice, have repeatedly treated advisors as their assets, and in turn have repeatedly behaved badly towards them!
However AMP is still deluded in the belief that they have an attractive proposition to the point where they are again actively attempting to lure/recruit advice firms to a tarnished brand with an appalling reputation. You couldn’t make this up!
Delusion is right. I rung up and spoke to one of their team to potentially broker a deal to buy one of their large practices that had fallen on hard times and had to exit. Despite not knowing my background in any way the person told me that they only allow elite advisers into their group and that I would likely not meet the criteria 🤦♂️
That firm subsequently went unsold and all the clients orphaned to the product and no sale done
From AMP’s point of view, they kept clients in AMP products, and prevented someone like you from potentially switching clients out of AMP products. When AMP says “elite adviser” they mean someone who is loyal to AMP’s products. If you were one of those people, they would have known you already.
Vertical integration is a lousy system for consumers, but one that Hayne not only endorsed, but aso enhanced through the gift of more compliance tools vertically integrated licensees can weaponise against their advisers to ensure recommendation of more inhouse product.