AMP Limited provides Q3 21 AUM and cashflows update 

From

Alexis George

Key points:

  • Australian wealth management (AWM) assets under management (AUM) remained steady at A$131.2 billion during Q3 21, with improved investment markets offsetting net cash outflows.
  • AWM net cash outflows of A$1.4 billion in Q3 21 improved from A$1.8 billion of net cash outflows in Q3 20 and includes A$0.5 billion in regular pension payments to clients in retirement.
  • North AUM increased A$1.7 billion to A$58.6 billion during Q3 21 supported by higher net cashflows of A$1.0 billion, including cash inflows of A$333 million from external financial advisers.
  • AMP Bank total loan book increased by A$0.3 billion to A$21.3 billion in Q3 21 driven by growth in residential owner-occupied loans in a highly competitive market.
  • AMP Capital AUM reduced to A$180.3 billion (1H 21: A$187.6 billion) reflecting an increase in net cash outflows.
  • AMP Capital experienced external net cash outflows of A$2.4 billion in Q3 21, primarily due to redemptions in public markets and real estate funds and partially offset by inflows into infrastructure equity capabilities.
  • AMP Capital internal net cash outflows of A$9.6 billion, largely reflects the previously announced exit of the NZ wealth management (NZWM) mandate of A$9.2 billion.

AMP Chief Executive Alexis George said: “With most of Australia in lockdown during the third quarter our businesses have focused on supporting customers, continuing to drive forward our simplification and preparing for our demerger next year.

“AMP Bank has delivered another strong quarter, amid a very active market, helping more of our customers to purchase a home.

“We’ve progressed our transformation of wealth management enabling us to deliver superannuation fee reductions at the start of Q4 as we committed. We’ve also continued to invest in our North platform, which has again grown assets under management.

“AMP Capital’s cashflows primarily reflected the internal outflows from NZWM, after the transition of the mandate to an index-based investment strategy, announced earlier this year, in line with market trends. Our Private Markets teams have continued to invest on behalf of our infrastructure clients and build its pipeline of opportunities.

“We have a clear focus on our priorities ahead, including to deliver the demerger of our Private Markets business from AMP in the first half of next year. We will provide an update on progress and the path forward at an Investor Day in November.”

Business unit results

Australian wealth management

  • AUM of A$131.2 billion at Q3 21 remained flat on the prior quarter, with positive investment market returns offsetting the impact of net cash outflows. Average AUM increased A$3.7 billion to A$132.4 billion.
  • Net cash outflows of A$1.4 billion in Q3 21 improved from A$1.8 billion net cash outflows in Q3 20 with the improvement largely attributed to an absence of Early Release of Super (ERS) payments, which were A$692 million in Q3 20. Net cash outflows for the period included A$468 million in regular pension payments to clients in retirement.
  • AUM on the North platform increased A$1.7 billion to A$58.6 billion during Q3 21.
  • North net cashflows of A$991 million were up 21 per cent on Q3 20, supported by pricing reductions announced in Q2 21 and an increase in inflows from external financial advisers to A$333 million.

AMP Bank

  • AMP Bank’s total loan book grew by A$0.3 billion to A$21.3 billion in Q3 21, driven by competitive owner-occupied pricing. Residential loan growth was above system growth for the period of July and August, at approximately 1.1x, in a highly competitive market.
  • Total deposits increased by A$1.0 billion to A$17.1 billion during Q3 21, reflecting a deposit to loan ratio of 81 per cent. A majority of flows were sourced from customer deposits, in line with the Bank’s strategy to optimise its funding mix.

AMP Capital

  • AMP Capital AUM reduced 4 per cent to A$180.3 billion, primarily reflecting an increase in net cash outflows.
  • Net cash outflows of A$12.0 billion in Q3 21 (net cash outflows of A$2.4 billion in Q3 20), includes:
    • Internal net cash outflows of A$9.6 billion, primarily due to the transition of the NZWM mandate to an index-based ESG-linked investment strategy, in line with market trends in the KiwiSaver market.
    • External net cash outflows of A$2.4 billion, reflecting redemptions and asset sales across public markets and real estate funds. Real Estate outflows included the sale of 200 George St for A$578.5 million, delivering an excellent result for the AMP Capital Wholesale Office Fund (AWOF) and its investors.
    • Cash inflows were supported by continued capital deployment in infrastructure equity investments during the quarter, including A$134 million through the Global Infrastructure Fund series and A$109 million in the AMP Capital Community Infrastructure Fund.
    • AMP Capital is continuing to actively defend its Real Estate funds, including from a capital perspective, with a focus on delivering the strongest outcomes to clients. In relation to the current AWOF management process, the Trustee has advised investors in the fund, including AMP Capital, that it now expects to update investors on its decision around mid-November.

New Zealand wealth management

  • New Zealand wealth management AUM increased to A$12.9 billion in Q3 21 (Q2 21: A$12.6 billion), driven by investment market gains which offset net cash outflows.
  • New Zealand wealth management net cash outflows of A$39 million (Q3 20: A$13 million), includes cash inflows of A$362 million, up 17 per cent on Q3 20. Inflows were offset by increased outflows, partly driven by KiwiSaver cash outflows following the announcement that our status as a default KiwiSaver provider was not renewed. AMP remains a non-default KiwiSaver provider with A$6.4 billion in total KiwiSaver AUM.
  • KiwiSaver net cash inflows of A$40 million were down on the prior corresponding period (Q3 20: A$64 million).

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