Today we have released AMP’s full year results for 2020.

2020 was an extraordinary year for the world, and indeed within AMP. Our full year performance reflects the disruption and economic impacts of COVID-19 and the significant transition that is occurring within our business environment as we progress into the second year of our three-year transformation strategy.

Despite the challenges to our operating environment brought on by external and internal disruption, we remained agile. Providing help and support to our clients during the pandemic has been our priority, as volatile markets impacted their investments and financial plans. While strong progress has been made in delivering to our ambitious transformation agenda and historical remediation issues, we acknowledge that AMP’s organisational instability has adversely impacted shareholder experience. We have earnestly listened to your feedback and the board and management commit to take all necessary actions to restore confidence and trust in our company.

Dividend and capital

As announced at our half year results, a ten cent special dividend was paid in October, following the completion of the AMP Life sale. As also indicated, the board has resolved not to declare a final full year 2020 dividend, which would usually be paid in March. We maintain a strong financial position and remain prudent with our capital with a surplus above total requirements of A$521 million.

The board understands the importance of dividends to shareholders and we are committed to restarting the group’s capital management initiatives including the payment of dividends, share buyback and other capital initiatives in 2021. This is subject to the completion of the portfolio review, market conditions and business performance.

Portfolio review

Our company experienced significant change in 2020. The sale of AMP Life, our life insurance and mature businesses in Australia and New Zealand, to Resolution Life Australia Pty Ltd marked a historic moment for our company as AMP ceased to be a life insurer after 170 years.

Following the completion of the sale, the board initiated a portfolio review with a number of parties to assess and respond to increased interest in the group’s assets and businesses. This included engagement with Ares Management Corporation (Ares), a US-based investment manager, on a non-binding, indicative and conditional proposal for a whole of company acquisition.

Following detailed discussions, we were advised last night by Ares, that they do not intend to proceed with the whole of company acquisition proposal. We continue to engage with Ares in relation to AMP Capital as part of the review as we explore all options to maximise the ability to grow and invest in AMP Capital, including exploring partnership options. We will provide an update on the outcome of these discussions as soon as possible.

Our review has confirmed that AMP’s transformation strategy for the AMP Australia and New Zealand wealth management businesses is likely to provide the optimal outcome for shareholders. The AMP board has therefore concluded the review of these assets.

FY 20 business performance

Business performance in 2020 remained resilient despite the market volatility and COVID-impact on clients and asset performance. Our underlying net profit after tax (NPAT) was down 33% to A$295 million. This was a result of volatile financial markets in our wealth management businesses in Australia and New Zealand, and our investment management business, AMP Capital. The COVID-19 related weakness in the Australian economy also led us to take a provision for potential mortgage defaults in AMP Bank, although reassuringly credit quality has remained strong.

Despite the conditions, our teams made strong progress on transforming the business. We have simplified our superannuation business and reduced fees for clients, continued to reshape our financial advice business and delivered a major technology platform upgrade in AMP Bank. In AMP Capital, we continued to invest in and grow our private markets businesses in global infrastructure and real estate.

Culture

Our industry is competitive and continuously changing, and achieving our goals requires a high-performance culture. The board and I are aware of the disappointment felt after questions about our company’s culture were raised last year. Improving corporate culture, including risk culture, is a core priority for AMP and is critical to the success of our three-year transformation program.

Looking forward

In 2020, AMP delivered against major milestones of its transformation strategy to become a more client-led, simple, and growth-oriented business in particularly challenging circumstances. In 2021 we intend to build on this momentum while continuing to operate within appropriate risk settings. We will always act in shareholders’ best interests and with absolute alignment to AMP’s values and purpose.

I am personally very encouraged by the number of people who expressly want to see AMP succeed in its ambitious transformation and am also buoyed by the resilience and passion of our people.

On behalf of our board, I sincerely thank you for your ongoing support.

To read more about our 2020 full year results, click here.

Debra Hazelton – Chair

11 February 2021