AMP, the Australian wealth management firm, posted an 11 per cent drop in net profit for the year to 31 December 2011 to A$688 million compared to the previous year due mostly to costs releated to merger and acquisition activities. 

Its underlying profit, excluding the M&A transactions linked with its merger with AXA in March, was A$909 million from A$760 million year-on-year. AMP says it prefers to measure its profitability with the underlying results as it removes merger related expenses and some of the impact of investment market volatility. 

The integration of the AXA and AMP businesses continues to track well, said AMP. By 31 December, the full year run rate synergies of A$55 million were achieved, exceeding AMP's A$30 million estimate. Integration costs were also lower than expected.

"The new AMP is stronger competitively, has a more diversified, balanced mix of business, a powerful domestic franchise and growing opportunities offshore. The resilience of the business is evident from our growth in banking, risk insurance and new wealth management products, despite the very challenging business conditions," commented Craig Dunn, chief executive of AMP. 

AMP experienced gains all throughout its wealth management businesses in the fourth quarter of 2011, with total Australian contemporary wealth management seeing cash inflows of A$5.07 billion and total Australian contemporary wealth protection achieving A$371 million in inflows.

The company now records A$111.05 billion total assets under management.