AMP Posts Solid Results Despite Subdued Year

Vanessa Doctor

22 February 2011

The year 2010 turned out to be solid for AMP Limited, which managed to deliver an underlying profit of A$760 million ($762 million) in the full year.

The result was 2 per cent lower than 2009, but the gain was recorded during a rather subdued market. Underlying profit is the bank's preferred measure of profitability as it removes the impact of investment market volatiliy and is the board's basis for divident payments. Net earnings attributable to shareholders was 5 per cent up at A$775 million.

Net cashflow for the year was down from A$1.7 billion in 2009 to A$789 million, but 63 per cent of funds under management met or exceeded benchmarks over the 12-month period. With the proposed AXA/AMP merger about to happen, the company's growth is expected to accelerate this year and possibly create a powerhouse non-bank wealth management company in Australia and New Zealand.

"Our continued investment in growth opportunities through the economic cycle has paid dividends, as demonstrated by the strong offshore cashflows from our investment management business in Asia," Craig Dunn, chief executive of AMP, said in a media release.

AMP Financial Services saw a 1 per cent drop in operating earnings to A$639 million, owing mostly to an increase in expenditure on growth initiatives designed to expand AMP's distribution capability. In contemporary wealth management, which covers financial planning, superannuation, pensions, and banking businesses, operating earnings grew 9 per cent to A$303 million, from A$278 million in 2009. AMP Bank was also a strong contributor to the solid 2010 results, posting a 20 per cent growth in operating earnings to A$42 million.

"Australia remains one of the largest and fastest growing wealth management markets in the world and over the medium term the dynamics underpinning wealth management in Australia and investment management in Asia will remain highly attractive," Dunn added.

The AXA/AMP merger is still subject to regulatory and shareholder approval.