Financials

Our performance reflects the significant changes underway as we execute our new strategy, reposition the sale of AMP Life, address legacy issues, and navigate an increasingly complex regulatory environment.
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2020 net profit after tax (underlying)

AMP performance

Australian wealth management

AMP Australia
$110m
Net profit after tax

Full year 2020 business unit highlights

  • 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.

Performance highlights

  • 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.

AMP Bank

AMP Australia
$119m
Net profit after tax

Full year 2020 business unit highlights

  • 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.

Performance highlights

  • 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.

AMP Capital

$139m
Net profit after tax

Full year 2020 business unit highlights

  • 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.

Performance highlights

  • 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.

New Zealand wealth management

$36m
Net profit after tax

Full year 2020 business unit highlights

  • 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.

Performance highlights

  • 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

  1. 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.

  2. $1.0 billion infrastructure debt; $1.8 billion infrastructure equity; $1.3 billion real estate.

  3. Measured by AUM. Source: FundSource Limited September 2020.

  4. Based on September 2020 market share data.

Financial summary

FY 2020
$m
2H 2020
$m
1H 2020
$m
FY 2019
$m
FY
%
Profit and loss
Revenue
 AUM based revenue
 Non-AUM based revenue
 Performance and transaction fees
 Net interest income
 Other revenue1
 
 
1,586
96
51
391
207
 
 
772
34
13
195
114
 
 
814
62
38
196
93
 
 
1,773
130
84
387
294
 
 
(10.5)
(26.2)
(39.3)
1.0
(29.6)
Total revenue 2,331 1,128 1,203 2,668 (12.6)
Variable costs
 Investment management expense
 Marketing and distribution
 Brokerage and commissions
 Loan impairment expense
 Other2
Total variable costs
 
(309)
(21)
(69)
(31)
(171)
(601)
 
(150)
(10)
(35)
4
(77)
(268)
 
(159)
(11)
(34)
(35)
(94)
(333)
 
(354)
(23)
(68)
(10)
(190)
(645)
 
12.7
8.7
(1.5)
n/a
10.0
6.8
Gross profit 1,730 860 870 2,023 (14.5)
Controllable costs
 Employee costs
 Technology
 Regulatory, insurance and professional services
 Project costs
 Property costs
 Other operating expenses3
Total controllable costs
 
(741)
(157)
(149)
(179)
(80)
(53)
(1,359)
 
(370)
(81)
(80)
(97)
(40)
(27)
(695)
 
(371)
(76)
(69)
(82)
(40)
(26)
(664)
 
(746)
(177)
(129)
(178)
(70)
(74)
(1,374)
 
0.7
11.3
(15.5)
(0.6)
(14.3)
28.4
1.1
EBIT 371 165 206 649 (42.8)
Interest expense4
Investment income5
Tax expense
Minority interests MUTB (post-tax)6
(85)
118
(93)
(16)
(39)
60
(38)
(2)
(46)
58
(55)
(14)
(96)
87
(165)
(36)
11.5
35.6
43.6
55.6
NPAT (underlying) by business unit
 Australian wealth management
 AMP Bank
 AMP Capital
 New Zealand wealth management
 Group Office7
295
110
119
139
36
(109)
146
47
69
64
18
(52)
149
63
50
75
18
(57)
439
195
141
204
44
(145)
(32.8)
(43.6)
(15.6)
(31.9)
(18.2)
24.8
NPAT (underlying) 295 146 149 439 (32.8)
Items reported below NPAT8
Market and other adjustments9
AMP Life earnings10
(185)
(62)
129
(144)
(28)
(41)
(34)
129
(2,878)
(70)
42
93.6
11.4
n/a
NPAT (statutory) 177 (26) 203 (2,467) n/a
FY 2020
2H 2020
1H 2020
FY 2019
Earnings
EPS – underlying (cps)11
EPS – actual (cps)12
RoE – underlying13
RoE – actual12
 
8.6
5.2
6.3%
3.8%
 
4.2
(0.8)
6.6%
(1.2%)
 
4.3
5.9
6.0%
8.2%
 
14.0
(79.5)
8.2%
Dividend
Special dividend per share (cps)
Franking rate14
Ordinary shares on issue (m)11
Weighted average number of shares on issue (m)
 – basic11
 – fully diluted11
 – statutory
Share price for the period ($)
 – low
 – high
Market capitalisation – end period ($m)
 
10.0
100%
3,437

3,437
3,493
3,428

1.11
2.08
5,361
 


3,437

3,437
3,493
3,434

1.28
1.89
5,361
 
10.0
100%
3,437

3,437
3,493
3,421

1.11
2.08
6,392
 


3,437

3,127
3,156
3,105

1.60
2.66
6,598
Capital and corporate debt
AMP shareholder equity ($m)
Corporate debt (excluding AMP Bank debt) ($m)
S&P gearing
Interest cover – underlying (times)13
Interest cover – actual (times)12
 
4,283
2,130
26%
6.1
4.1
 
4,283
2,130
26%
6.1
4.1
 
5,007
2,130
23%
6.3
1.4
 
4,910
2,139
20%
8.1
Margins
Australian wealth management AUM
 based revenue to average AUM (bps)
AMP Capital management fees to
 average AUM (bps)
AMP Bank net interest margin
 (over average interest earning assets)
 

73

34.1

1.59%
 

71

32.6

1.55%
 

75

35.5

1.63%
 

82

36.1

1.69%
Cashflows and AUM
Australian wealth management net cashflows ($m)
Australian wealth management AUM ($b)15
AMP Capital real asset net cashflows ($m)
AMP Capital public markets net cashflows ($m)
AMP Capital net cashflows ($m)
AMP Capital AUM ($b)16
Non-AMP Capital managed AUM ($b)17
Total AUM ($b)17
 
(8,306)
124.1
2,682
(14,512)
(11,830)
190
65
255
 
(3,945)
124.1
599
(8,526)
(7,927)
190
65
255
 
(4,361)
121.0
2,083
(5,986)
(3,903)
190
63
253
 
(6,341)
134.5
2,735
(7,924)
(5,189)
203
69
272
Controllable costs (pre-tax) and cost ratios
Total controllable costs ($m)
Cost to income ratio
Controllable costs to average AUM (bps)
 
1,359
75.5%
52
 
695
77.5%
54
 
664
73.5%
50
 
1,374
66.0%
50
  1. Includes seed and sponsor income, SuperConcepts, Advice and other revenues.
  2. Includes payment of commissions, employed planner expenses and other variable selling costs.
  3. Includes travel, marketing, printing, administration and other related costs.
  4. Includes interest expense on corporate debt and seed and sponsor financing costs.
  5. Includes equity accounted share of profits from investments in associates and underlying investment income returns on Group Office investible capital.
  6. 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.
  7. Includes Group Office costs, investment income and interest expense on corporate debt.
  8. NPAT (underlying). Refer to Glossary for details.
  9. Includes market adjustment for investment income and accounting mismatches.
  10. AMP has completed the sale of its life insurance business, AMP Life (the Australian and New Zealand wealth protection and mature businesses) to Resolution Life. Operating earnings for AMP Life accrue to Resolution Life from 1 July 2018 until 30 June 2020. AMP has reported these earnings through to 30 June 2020.
  11. Number of shares has not been adjusted to remove treasury shares.
  12. Includes AMP Life.
  13. FY 2019 includes AMP Life.
  14. Franking rate is the franking applicable to the dividend for that year.
  15. Excludes SuperConcepts assets under administration.
  16. FY 2020 includes AMP Capital’s 24.9% share of PCCP.
  17. Includes investments held in cash, directly in equities or with external fund managers and SuperConcepts AUA.
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