AMP recognises $325m in impairments

In what represents a tidy-up of its books ahead of its impending demerger, AMP has announced the recognition of additional impairment charges of approximately $325 million.

The recognition of the charges reflects a company that will be reshaped and smaller.

The company announced the additional impairment charges to the Australian Securities Exchange (ASX) today noting that they were mainly non-cash and reflected a comprehensive review of the balance sheet which included the partial impairment of deferred tax assets, a write down of intangibles, onerous lease contracts arising from lower future accommodation requirements and other impairments and adjustments including a review of lease assets,.

It said the impairments were expected to have an impact on capital of approximately $220 million and would be recognised as a significant item against statutory profit in AMP’s 2021 financial results but would not impact the underlying net profit after tax.

The company said it continued to have a sound capital position with a proforma 30 June surplus of approximately $440 million reflecting the actual 30 June 2021 position.

AMP chief executive, Alexis George said that as the company had developed strategies for the post-demerger businesses of AMP and Private Markets it had review its balance sheet to ensure that assets recorded were in line with the future strategic direction.

“The charges are mainly non-cash and related to legacy issues, and our action will ensure that both businesses are in a stronger position to take advantage of opportunities in the future,” she said.