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Craig Meller
Group delivers solid business performance, in line with guidance metrics.
- Australian wealth management (AWM) assets under management increased A$211 million during Q3 17 to A$125.3 billion.
- AWM net cash outflow of A$243 million reflects high levels of discretionary super contributions brought forward into Q2 17 ahead of 1 July 2017 changes to non-concessional caps.
- Net cashflows on AMP North platform of A$1.3 billion in the quarter, up 13 per cent on Q3 16.
- AMP Capital net external cashflows of A$616 million driven by strong cashflows from China Life AMP Asset Management (CLAMP) and real assets.
- AMP Bank’s total loan book grew to A$19.2 billion during the quarter.
- Australian wealth protection performance stable with experience tracking in line with expectations.
AMP Chief Executive Craig Meller said: We have made good progress in the quarter and the business is tracking in line with expectations.
In Australian wealth management, as expected, cashflows reflect the high level of discretionary super contributions brought forward into Q2 17, ahead of 1 July 2017 changes to non-concessional caps.
AMP’s award-winning North platform continues to perform strongly, with cashflows increasing during the quarter.
AMP Capital has had a strong third quarter, increasing external net cashflows as well as putting investors’ money to work in its core infrastructure and real estate portfolio, including securing a record US$4.1 billion in commitments for its infrastructure debt strategy.
In Australian wealth protection, experience has been tracking in line with expectations, delivering another stable quarter for the business. Our second program of reinsurance agreements will take effect from 1 November 2017 adding further stability to earnings. The agreements will also release approximately A$500 million of capital to the group, subject to regulatory approval.
Commentary
Australian wealth management
- Net cash outflows of A$243 million in Q3 17 compared to net cash outflows of A$327 million in Q3 16. As expected, the Q3 17 result reflects high levels of discretionary super contributions brought forward into Q2 17 ahead of 1 July 2017 changes to non-concessional caps.
- AMP’s award-winning wrap platform, North, continued to perform strongly with Q3 17 net cashflows of A$1,282 million, increasing 13 per cent from A$1,136 million in Q3 16.
- Total Australian wealth management AUM increased A$211m to $125.3 billion, reflecting positive investment returns.
- AMP’s SMSF business SuperConcepts added approximately 1,475 funds across administration and software services during Q3 17. As at 30 September, it supported a total of 57,779 funds.
- Wealth management ‘other revenue’ is on target to deliver 10 per cent growth from Advice and SMSF in FY 17.
- Margin compression continues to track in line with guidance; it is expected to average around 5 per cent per annum to December 2017.
AMP Capital
- AMP Capital external net cashflows were A$616 million in Q3 17, an increase from A$498 million in Q3 16, driven by flows into real estate and infrastructure investments, and strong performance by CLAMP.
- AUM increased from A$178.9 billion at the end of Q2 17 to A$180.6 billion in Q3 17.
- Strong performance in real assets with record commitments of US$4.1 billion secured for the infrastructure debt strategy, including reaching final close on Infrastructure Debt Fund III (US$2 billion target). Commitments will flow through to AMP Capital’s external net cashflows when investments are made.
- AMP’s partnership with China Life continues to grow; AMP Capital’s share of CLAMP contributed net cashflows of A$682 million in Q3 17, taking net cashflows from the first three quarters of the year to more than A$1.4 billion.
- International institutional client numbers grew 10 per cent to 277 during the quarter, supporting AMP’s strategy to grow its global footprint in investment management.
AMP Bank
- Total loan book grew to A$19.2 billion at the end of Q3 17, an increase from A$18.8 billion in Q2 17.
- Retail deposit book increased by A$329 million in Q3 17 relative to Q2 17.
Australian wealth protection
- Stable quarter in wealth protection with experience tracking in line with expectations.
- New reinsurance arrangements are due to take effect on 1 November 2017, further stabilising wealth protection earnings and releasing approximately A$500 million of capital from the AMP retail life insurance portfolio to the group, subject to regulatory approval.
New Zealand financial services
- AMP New Zealand financial services’ net cashflows decreased to A$76 million in Q3 17, driven by elevated fund transfers in Q3 16 as a result of regulatory change (FMCA).
- Net cashflows in KiwiSaver remain largely unchanged at A$107 million (A$108 million in Q3 16).
Australian mature
- Australian mature net cash outflows in Q3 17 were A$356 million, compared to A$391 million in Q3 16, reflecting the run-off nature of the book.