AMP puts off listing

AMP is deferring a planned initial public offering (IPO) of its wealth management business until after it has separated off its insurance operations.

Thursday, February 14th 2019, 10:30AM

Blair Vernon

It announced the sale of its life insurance and mature business to Resolution Life last year and stopped selling AMP life insurance to new customers on January 1.

As part of that, it was revealed that AMP planned to list its New Zealand wealth arm, including KiwiSaver, on the stock exchange.

Now New Zealand managing director Blair Vernon said, given its focus on separating off the life business, the IPO would be deferred until that process was finished.

“The separation will establish AMP New Zealand’s wealth management business as a standalone business unit with a mandate to accelerate business growth.

“We are also focused on continuing to support advisers to respond to the unprecedented period of change occurring in our industry, which reflects our unwavering belief that the provision of sustainable access to advice is critical for all New Zealanders and their long-term financial wellbeing.

“At the same time, we continue to promote and support appropriate and transparent practices across our industry and seek to maintain our leadership position in terms of advice and conduct standards.”

Assets under management in the wealth business declined by 3% in the financial year, to $11.6 billion, which AMP said was largely due to unfavourable investment market conditions.

“Despite challenging market conditions, we continued to deliver on our commitment to provide high-quality advice and services to support our customers through the country’s most extensive and diverse network of financial advisers.”

The insurance business paid out $233m in claims.

Vernon said he expected to receive AMP’s individual report, as part of the Financial Markets Authority and Reserve Bank’s review of the insurance sector’s culture and conduct, soon, “which we will thoroughly review to address any further actions to continue to protect the interests of our customers”.

As a whole, AMP reported net profit of A$28 million ($29.2m), down from A$848m the year before, and operating earnings of $363m. New Zealand had operating earnings of $57m.

Chief executive Francesco De Ferrari said: “2018 has been a challenging year for AMP. Our core businesses have delivered resilient results, with continued growth in AMP Capital and AMP Bank offsetting the headwinds faced in Australian wealth management

“2019 will be a transitional year as we prioritise the complex legal separation from the businesses sold to Resolution Life, and deliver on our commitments to remediate advice customers and strengthen our risk management, governance and controls. Delivery on these priorities is a precondition to set a strong foundation for future growth.”

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