A decrease in net profit after tax to $110 million (FY 2019: $195 million) reflects the impact to revenue from weaker investment markets due to COVID-19.
Early release of super payments to clients and the exit of previously announced corporate super clients accounted for $3.6 billion of the net cash outflow of $8.3 billion. Pension payments to clients in retirement of $2.1 billion in 2020 are also reported as cash outflows.
The flagship North platform continued to perform favourably with cashflows of $3.7 billion.
The Super business began its separation and simplification in the first half of 2020, successfully completing a $60 billion Successor Fund Transfer – one of the largest in Australian history – as part of the sale of AMP Life. Simplification supported reduction from approximately 70 super products to 11, reducing complexity for clients. The number of Trustees was also reduced from two to one.
Strong progress on reshaping the adviser network. The program is well advanced with a 37% reduction in practice numbers to 595 and a 26% reduction in adviser numbers to 1,573 as we move towards a more professional, compliant and productive network.
“I am passionate about helping people of all ages better understand their options, opportunities and what’s possible so they can make informed financial decisions today, while setting themselves up for the life they want later,” says Stephen. “Every person I talk to goes away with a few things to look into. The challenge we face is getting people to engage with what could be their largest investment they have – a lot of people don’t know where their money is invested, if they have insurance or not, the importance of a beneficiary nomination or tax effective contribution strategies.”
Jessica explains, “Through the volatility of COVID-19, our team were able to remind members that super is a long-term investment and that markets generally recover. Every day I see the positive difference we make in the life of our members. The most common feedback I get is that they get peace of mind from feeling more in control of their finances and understanding the ins-and-outs of their super investment.”
“I’ll never really know the full impact on a client’s situation after our conversation in terms of exact quantum but I do take enormous pride in educating Australians about their super and feel very privileged that I have helped client set up for success down the track.”
In 2020, AMP Bank made a provision for credit losses in response to economic impacts of COVID-19 on mortgage holders. The provision is reflected in net profit after tax of $119 million (FY 2019: $141 million).
Mortgage book resilient at $20.2 billion amid increased competition due to easing of regulatory restrictions on lending and lower interest rates.
Good credit quality maintained with 90+ day arrears 0.62% improving on FY 2019 (0.66%).
Net interest margin was 1.59% in FY 2020, 10 bps lower than FY 2019 driven by higher funding and deposit costs.
Strong deposit growth with an increase of 12% to $16.1 billion (FY 2019: $14.4 billion) strengthening funding base.
The renovation of AMP Bank’s core technology was completed on time and under budget. Digital enhancements and automation capabilities including the launch of Apple Pay and upgrades to automated credit decisioning and straight-through processing on loans were also delivered increasing efficiencies and growth opportunities.
The uncertainty created by the pandemic, from both a health and economic perspective made 2020 a particularly tough year for many.
Through the AMP Foundation, we launched a partnership with Good Shepherd, a non-profit, financial inclusion leader, to provide specialised assistance through these challenging times.
AMP and Good Shepherd have established a specialist team of financial wellbeing experts to help AMP clients in financial hardship, empowering them with a greater understanding of the options available to them.
This initiative brings together our expertise as a company, our passion to support and care for our clients and our purpose of helping realise human ambitions.
AMP Capital aims to be a trusted partner of its clients delivering consistent investment performance. Although the market volatility experienced in 2020 made this more challenging, as at 31 December 66% of AUM outperformed market benchmarks over a three-year time period.
AMP Capital’s FY 2020 net profit after tax decreased to $139 million1 (FY 2019: $204 million) with transaction and performance fees down due to the impact of COVID-19 on investment markets.
AUM-based earnings proved relatively resilient, in light of the challenging economic environment and equity market volatility.
Average AUM decreased to $193.8 billion reflective of challenging market conditions.
International institutional client base grew by 42 to 400 in FY 2020, AUM up 8% to $22.0 billion.
Continued momentum in infrastructure debt and infrastructure equity series of funds with $3.5 billion of capital deployed in 2020. A strong commitment to real estate capabilities with $4.1 billion2 of uncalled committed capital available to be deployed.
Delivered a robust investment performance in real estate with 72% of AUM outperforming benchmarks over a three-year period.
Exceptional performance throughout a period of extreme volatility in global equities and fixed income with 94% of AUM outperforming benchmark over three years.
In Australia, Perth’s 60,000-seat Optus Stadium was used as a crisis centre and hub for Western Australia Police’s COVID-19 response effort. In Ireland, The Convention Centre Dublin was selected as a temporary venue for parliamentary sittings of the Irish Government as the venue could safely seat all 160 members while still allowing for appropriate social distancing.
One of the four key sectors of AMP Capital’s infrastructure equity strategy is infrastructure health. Valley Healthcare, our primary care centre business in Ireland, committed €1.5 million to build temporary community assessment clinics in the carparks of its primary care centres. In Australia, non-clinical spaces in Sydney’s Royal North Shore Hospital were quickly converted into clinical spaces, including a new 40-bed ward.
Net profit after tax fell 18% to $36 million (FY 2019: $44 million) impacted by the closure of legacy products as part of the business’ transformation strategy and COVID-19 related lockdown impacting the business’ ability to generate advice-related income.
AUM of $12.4 billion increased $1.0 billion from FY 2019. Increase was predominantly driven by a combination of investment market gains ($526 million) offset by negative foreign exchange movements ($341 million) and net cash outflows of $57 million which improved from FY 2019 net cash outflows of $433 million largely due to improved KiwiSaver performance.
Accelerated the delivery of enhanced digital capabilities with a focus on improving client outcomes and experience.
Maintained position as a leading non-bank provider of KiwiSaver3, with KiwiSaver generated net cash inflows of $229 million.
Remains largest provider of corporate super with ~45% market share and $3.2 billion in AUM.4
The business will move to a predominantly index-based investment strategy in the first half of 2021 to provide a simpler and more cost-effective investment structure, with the aim of improving performance and driving better
outcomes for clients.
Through the revised investment approach, NZWM is also aiming to increase its focus on helping to reduce the impacts of climate change.
The move to a predominantly passive investment approach is in response to a change in expectations among our
NZWM clients, as well as regulators and governments, who are looking for simple and value-adding solutions for KiwiSaver plans.
The AMP Capital business unit results and any other impacted line items are shown net of minority interests. AMP regained 100% ownership of AMP Capital and MUTB’s minority interest consequently ceased on 1 September 2020.
$1.0 billion infrastructure debt; $1.8 billion infrastructure equity; $1.3 billion real estate.
Measured by AUM. Source: FundSource Limited September 2020.
Based on September 2020 market share data.