AMP Limited provides Q1 23 Bank, AUM and cashflows update

Key points

• Continued disciplined growth in AMP Bank, with loan book increasing by $0.2 billion to $24.2 billion.
• Australian Wealth Management (AWM) assets under management (AUM) increased by $2 billion to $126.2 billion.
• AWM net cash outflows improved by more than 30 per cent on the prior corresponding period driven by further stabilisation of Master Trust outflows.
• North inflows from independent financial advisers (IFA) continue to grow, up 30 per cent on Q1 22.
• New Zealand Wealth Management’s KiwiSaver net cashflows increased to $44 million (Q1 22: $10 million).

AMP Chief Executive Alexis George said: “We continue to take an active approach to managing the Bank’s loan book, being disciplined in our growth in a highly competitive market to maintain strong credit quality and margin. We are conscious of the impact of rising interest rates on customers and continue to focus on providing competitive loan and deposit rates.

“In Australian Wealth Management, assets under management have grown by $2 billion over the past quarter and we have reduced net cash outflows compared to Q1 2022. In our Platforms business, our continued strategic focus on the independent financial adviser market is reflected in inflows from IFAs to the North platform being up 30 per cent on the same period last year.

“In the New Zealand business, we continue to consolidate our strong position in the KiwiSaver market with increased inflows into AMP KiwiSaver.

“The completion of the sale of the final AMP Capital business last month has further sharpened our focus on driving the performance of our banking and wealth management businesses. At the same time, we are progressing our capital and balance sheet review, as well as determining the appropriate operating model and cost base for the business going forward.”

AMP Bank

• AMP Bank’s total loan book grew by $0.2 billion to $24.2 billion in Q1 23. Residential loan growth was 0.3x system to the end of February 2023. Through March and early April, we are seeing improving momentum in loan applications and growth.
• We continue to actively manage the AMP Bank portfolio in a highly competitive market to maintain credit quality and margin.
• Net Interest Margin remains broadly in line with FY 22.
• As part of AMP Bank’s wholesale funding strategy, a Residential Mortgage Backed Securities (RMBS) deal in March 2023 raised $750 million, while total deposits decreased by $0.3 billion to $20.6 billion during Q1 23.
• While economic conditions have become more difficult for some borrowers, AMP Bank’s credit quality remains strong. Although there are currently very few signs of stress in the book, we remain vigilant, and are working with customers to find appropriate solutions where required.

Australian Wealth Management

• Australian Wealth Management AUM increased to $126.2 billion (Q4 22: $124.2 billion), reflecting positive investment markets, partly offset by net cash outflows and pension payments.
• Net cash outflows of $0.6 billion in Q1 23 improved from net cash outflows of $0.9 billion in Q1 22. Separately, regular pension payments to ongoing members amounted to $468 million in Q1 23 (Q1 22: $455 million).
• In order to more accurately reflect the nature of the business, AMP is now reporting pension payments separately to net cashflows, and prior periods have been adjusted accordingly.
• AUM on the North platform of $62.8 billion increased by $1.5 billion on Q4 22 AUM of $61.3 billion.
• In Platforms, net cash inflows of $152 million compared to inflows of $406 million in Q1 22^[1]. This was driven by lower internal inflows from Master Trust by $106 million, as well as a 7 per cent increase in outflows compared to Q1 22.
• North inflows from IFAs continue to grow, increasing 30 per cent on Q1 22.
• The rationalisation of legacy platforms is nearing completion, with iAccess expected to transition to North in Q2 23.
• Master Trust net cash outflows of $610 million improved on the $1 billion in Q1 22 (Q1 22 included a mandate loss of $0.3 billion).

New Zealand Wealth Management

• KiwiSaver net cash inflows of $44 million (Q1 22: $10 million) driven by improved customer acquisition and retention.
• New Zealand Wealth Management divested a legacy product in Q1 23, resulting in cash outflows of approximately $185 million in the quarter.
• AUM increased to $10.7 billion (Q4 22: $10.5 billion) despite the loss of AUM associated with the sale of the legacy product in Q1 23.

———-

[1] Q1 22 has been restated to reflect that Flexible Lifetime Investment is now reported within Other wealth management.