Mr. de Bruin’s appointment follows Nippon Life’s announcement in December 2024 that it had agreed to acquire 100% of the shares of Resolution Life. On completion of this transaction, which is subject to regulatory approvals and is expected to occur in the second half of 2025, Acenda and Resolution Life Australasia will merge to form one of the largest life insurance businesses in Australia and New Zealand.

Mr. de Bruin brings a wealth of experience, from an exceptional 25-year career in executive roles in the financial services sector globally. His appointment as the Acenda Group CEO further strengthens the leadership of the merged group, in concert with the previously announced Chair, Mr. Craig Dunn, and Independent Non-Executive Directors. Mr. de Bruin’s appointment will take effect upon completion of the transaction.

Acenda and Resolution Life Australasia extend their sincere thanks to the current Acenda CEO, Mr. Kent Griffin and Resolution Life Australasia CEO, Mr. Tim Tez for their exceptional leadership and dedication during their tenure. Their contributions have laid a strong foundation for the future success of the Acenda Group as the company begins its new chapter. Mr. Griffin and Mr. Tez will remain with the company for a period and will support Chris with his onboarding.

Mr Satoshi Asahi, President of Nippon Life said, “It is with great pleasure that I extend a warm welcome to Mr. de Bruin upon his appointment as the new CEO of the Acenda Group. I am confident that he brings the experience and strategic insight essential for steering the organisation through the integration process and beyond.

“I would also like to express my heartfelt gratitude to Mr. Kent Griffin for his invaluable contributions to the growth and development of Acenda during his appointment.

“Under Mr. de Bruin’s leadership, I believe the Acenda Group will enhance its position in the market while consistently delivering exceptional service and value to its policyholders.  I look forward to supporting him as he embarks on this important journey to lead our Australian and New Zealand operations.”

Sir Clive Cowdery, Founder, Chairman and CEO of Resolution Life, said, “This is an important time for the industry in Australia and New Zealand, and Acenda’s customer focussed agenda will greatly benefit from Chris de Bruin’s strategic vision. I would like to thank to Tim Tez for the outstanding job he has done as CEO of Resolution Life Australasia during these last three years.”

Mr Craig Dunn, the future independent Chair of Acenda said, “On behalf of everyone at the new Acenda Group, I extend a generous welcome to Mr. Chris de Bruin as our new CEO. Having had the pleasure of working with Chris before, I know the strength of leadership and strategic insight he will bring to the role, and the great passion he has for creating an exceptional experience for both customers and employees alike. I pass on my sincere thanks and best wishes to both Kent and Tim for their dedication and commitment to leading the organisations that will make up the Acenda Group, and for fostering the development of the growth platforms that I know will provide a strong foundation for the future success of Acenda.”

Mr. Chris de Bruin said, “I am excited to join the Acenda Group at the start of this new chapter. I would like to thank Nippon Life President Satoshi Asahi and Resolution Life Founder & CEO Sir Clive Cowdery for the opportunity. Building on the foundations established under the leadership of Kent Griffin & Tim Tez, I look forward to working with our Chair Craig Dunn, the Board, our shareholders and the exceptional team across the Acenda Group to achieve our vision to provide outstanding service and value to our customers and partners.”

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Leona Murphy

Asia’s largest fintech innovation hub, Stone & Chalk, has announced the appointment of a new chairman and suite of new board members, as it prepares for its next phase of growth, transitioning out of “start-up” mode to “scale-up” mode itself.

After the conclusion of Stone & Chalk’s AGM in November, Leona Murphy, who had already served for three years on the board, will move up and replace Craig Dunn as Chairman, whose three-year term was set to expire.

Speaking on Craig’s departure, Stone & Chalk CEO, Alex Scandurra, said; “I will forever be grateful to have served as CEO alongside someone with the wealth of knowledge, experience, and passion for supporting Australian fintech as Craig Dunn has had these past three years.

“He has been incredibly generous with his time during his tenure, and remains dedicated to our higher purpose of building Asia’s leading fintech ecosystem. I look forward to a continued personal and professional relationship, with Craig remaining within the family as a Stone & Chalk Global Ambassador,” said Mr. Scandurra.

Leona will bring a vast range of relevant experience as she steps up to the new role, including 20 years in financial services, 10 years in C-Suite roles in Top 20 ASX-listed organisations, and multiple board positions across public, private and member based organisations.

“Leona was a natural choice to step into Craig’s very big shoes, given her demonstrated leadership and business success across a variety of relevant industries and business types,” continued Mr. Scandurra.

“She has more than proven her commitment to fostering and accelerating the development of our world-leading portfolio of fintechs during her tenure on our board over the last three years. She’s been instrumental in supporting the development of Stone & Chalk’s strategy, and continually exemplifies our core values of honesty, transparency, and integrity.

“Leona will be integral in helping to shape and guide our approach as we move into our next ‘ramp up’ phase, cementing our position not just as the natural centre of gravity for fintech in Australia, but as a destination for leading fintechs from across the globe,” said Mr. Scandurra.

Speaking of her appointment, Ms Murphy said, “I’m delighted to have been given such an exciting opportunity, and am deeply impressed by the exceptional quality of our new Board. It will be my pleasure to help guide Stone & Chalk’s transition into its next phase of growth alongside such a passionate Board and management team.”

New Board appointments include:

• Anthony Eisen (Executive Chair and co-founder of Afterpay; Melbourne-based)
• Aris Allegos (CEO of Co-Founder of Moula; HO in Melbourne, S&C resident in Sydney)
• Debra Taylor (COO of OpenSparkz; S&C resident in Sydney)
• Carol Trotman (COO of WordFlow; S&C resident in Sydney)
• Ron Arnold (Managing General Partner at IAG Firemark Ventures & Firemark Singapore, S&C corporate partner)
• Kylie Rixon (CRO of ANZ Digital and Wealth; S&C corporate partner)
• Richard Kimber (CEO and co-founder of Daisee)

The new recruits will also join Ian Pollari, who remains on as a director after joining at Stone & Chalk’s inception, and who is Global Co-Lead of KPMG’s Fintech practice and Head of KPMG’s Banking Sector in Australia.

All potential candidates were screened against the Stone & Chalk Board Skills Matrix, to ensure the final selection possessed a suitable mix of relevant skills, experience, diversity, and knowledge to guide and provide effective oversight of the company.

Of the final Board composition, six of its nine directors have successfully founded start-ups, five currently hold senior positions with leading fintech businesses in Australia, and three have senior leadership positions with corporate partners of Stone & Chalk. Nearly half are women, and all have extensive financial services experience.

“It’s well-known that boards with greater diversity across factors, such as industry background and experience, achieve higher revenue growth, profitability and shareholder returns than those without,” continued Mr Scandurra.

“As we head into our next phase of rapid expansion, we are confident that the team we have selected possesses the perfect balance of experience, skills, and perspectives to take us to the next level and beyond,” he concluded.

Pursuant to the Constitution of Stone & Chalk, all new directors will stand for election at the coming AGM in November 2018. For more information: www.stoneandchalk.com.au

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AMP to offer investors in China access to investment solutions

AMP Capital is to establish a funds management company in China with China Life Asset Management Company, a subsidiary of China Life Insurance (Group) Company, China’s largest insurance group, institutional investor and corporate pension manager.

China Life AMP Asset Management Company Limited will offer retail and institutional investors in China access to leading investment solutions initially in domestic listed equities and fixed income.

AMP Capital will be a founding shareholder holding a 15 per cent stake in China Life AMP Asset Management Company Limited with the balance to be held by China Life Asset Management Company. The joint venture has received regulatory approval from the China Insurance Regulatory Commission (CIRC), and is subject to regulatory approval by the China Securities Regulatory Commission (CSRC).

China Life AMP Asset Management Company Limited will be China Life’s first joint venture in mainland China with a foreign partner in funds management.

AMP Capital and China Life Asset Management Company are the first to take advantage of new regulations which came into effect 21 June 2013, allowing insurance companies in China to establish funds management companies offering public mutual funds to retail and institutional investors.

The sweeping new reforms are expected to provide investors easier access through new distribution channels and drive more innovative investment solutions to meet the evolving needs of Chinese customers in this rapidly growing savings market.

The rapid growth of wealth management in China presents significant opportunities for funds management companies. Total assets under management in China’s mutual fund industry is expected to reach A$0.8 trillion in 2013 growing at 15 per cent per annum to reach almost A$1.5 trillion in 2017¹ .

AMP Chief Executive Officer Craig Dunn said China is an important part of AMP’s growth strategy which is focused on expanding internationally through its funds management business AMP Capital.

“A funds management joint venture in China is a strategically significant move for AMP, giving us direct access to the world’s second largest and fastest growing major economy ² ,” Mr Dunn said.

“Both China Life and AMP share a common heritage of being among the most well-known and respected financial services brands in our home markets.

“The funds management joint venture represents the commercialisation of our Memorandum of Understanding (MOU) with China Life and is the ideal balance of our mutual strengths and capabilities,” Mr Dunn said.

AMP Capital has developed a reputation for delivering high quality investment solutions for global pension funds, institutional investors and retail investors with expertise in key asset classes such as real estate, infrastructure, equities and fixed income.

AMP Capital Chief Executive Officer Stephen Dunne said: “China Life Asset Management Company brings a strong brand and leading market position, significant distribution capability and a deep understanding of customer needs in a dynamic market to the joint venture. While AMP Capital has extensive expertise in product development, risk management, governance expertise and investment and research which will be shared with the joint venture.

“Having an on-the-ground presence is vital to building a sustainable position as an onshore player and together China Life Asset Management Company and AMP Capital have the combined capability to succeed. We’re really excited about being part of the rapid growth of funds management in China,” Mr Dunne concluded.

With this joint venture AMP Capital now has significant institutional and retail reach in three of the world’s largest savings and pension markets – Australia, China and Japan.

AMP has had a presence in China since 1997 and AMP and China Life have had a formal relationship for nearly eight years.

The relationship became a closer, deeper relationship in 2006 when the two companies cooperated in Qualified Foreign Institutional Investor (QFII) investments and subsequently when China Life and AMP entered into the MOU for Strategic Cooperation in late 2009 which encompassed areas for partnership in funds management and pensions.

Since the signing of the MOU, both AMP Capital and China Life have been actively exploring mutual cooperation in a number of areas while exchanging investment expertise and experience.

– See more at: http://media.amp.com.au/phoenix.zhtml?c=219073&p=irol-newsArticle&ID=1851093&highlight=#sthash.d17lpAIc.dpuf

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AMP releases 2012/13 profit results.

AMP Limited has reported a net profit of A$393 million for the half year to 30 June 2013^[1], up 5.4 per cent on A$373 million reported for 1H 12.

Underlying profit^[2] was A$440 million compared with A$488 million for 1H 12, reflecting strong growth in the earnings of all business units, except wealth protection which was affected by a challenging life insurance market, and lower underlying investment income.

The Board has declared an interim dividend of 11.5 cents per share compared with 12.5 cents per share for the 2012 interim dividend.  This represents a payout ratio of 77 per cent of underlying profit and is within AMP’s target range of paying 70-80 per cent of underlying profit in dividends.  The dividend will be 70 per cent franked, with the unfranked amount being declared as conduit foreign income.

AMP also announced a new business efficiency program is underway that is expected to deliver A$200 million pre-tax recurring, run-rate cost savings by the end of 2016.

The company will invest around A$320 million (pre-tax) over the next three and a half years to deliver these business efficiencies, to further strengthen its competitive position in a market that continues to change.  These one-off costs will be funded through a combination of future retained earnings, the capital surplus and new shares issued under the dividend reinvestment plan (DRP).

Chief Executive Officer Craig Dunn said with the AXA integration project almost complete, having met or exceeded all its objectives, AMP is now ready to capitalise further on the strengths of the merged business and take the company to the next level.

“We will continue to build on the success of the merger to create a leaner, more efficient and increasingly customer-driven organisation.

“We will increase the scale and pace of change in our core business, using our expertise and Australia’s largest adviser footprint,

to respond to consumers’ demands for greater control, transparency, simplicity, convenience and value,” Mr Dunn said.

Performance against key measures:

• Underlying profit: A$440 million in 1H 13, down 10 per cent on 1H 12, reflecting poor lapse and claims experience in wealth protection and lower underlying investment income – following a reduction in the assumed after tax investment return on shareholder funds flagged in February 2013, given falling interest rates.
• Cost to income: Controllable costs fell again, down 3 per cent from 1H 12 to A$652 million.  The cost to income ratio was 48.6 per cent for 1H 13, up 2.1 percentage points on 1H 12.  All business units, excluding wealth protection, achieved substantial improvements in their cost ratios.

Growth measures:

• AMP Financial Services’ net cashflows were A$862 million, a significant improvement from net cash outflows of A$113 million in 1H 12, reflecting the continued success of the North platform and AMP Flexible Super.
• AMP Capital external net cash outflows were A$2,070 million, an increase in net cash outflows from A$1,345 million for 1H 12, impacted by the withdrawal of funds by Japanese retail clients driven by the effects of Japanese economic policy, including a weaker Yen.
• AMP Financial Services’ value of risk new business was A$69 million, compared with A$112 million for 1H 12, primarily as a result of lower sales volumes and strengthened lapse assumptions in FY 12.
• Underlying return on equity: Reduced 2.2 percentage points to 11.2 per cent in 1H 13 from 1H 12, reflecting higher capital held, poor insurance experience and lower underlying investment income.

Mr Dunn said AMP’s wealth management and investment businesses performed strongly, offset by a challenging life insurance market.

“The combined earnings from all businesses, excluding our wealth protection business, were up

17 per cent, as net cashflows increased significantly in our wealth management business, investment markets continued to improve and we drove down costs.

“These results demonstrate the real potency of AMP’s business franchise, scale and operating leverage, when both investment markets and investor confidence are more positive,” Mr Dunn said.

In wealth management, AMP’s largest business unit, operating earnings for 1H 13 were up 20 per cent compared with 1H 12, reflecting increased investment related income from higher customer account balances, a strong rebound in net cash flows, good cost control in a growing business and substantial growth in AMP Bank profits, up 31 per cent on 1H 12.

In wealth protection, operating earnings were A$64 million, down 52 per cent on 1H 12, reflecting a higher level of claims and insurance policy lapses than expected, as reported in AMP’s 24 June earnings update.

The life insurance sector is facing both structural and cyclical change, and a range of initiatives are in train to address these factors.  These include improved customer retention campaigns, additional resources to handle customer claims more effectively, and helping income protection customers get back to work more quickly after illness or injury.

“Improving the performance of the insurance business is an area of critical focus as we introduce a series of actions to improve both customer retention and the management of claims, and which will deliver benefits to both customers and shareholders,” Mr Dunn said.

While these actions should deliver some benefits in the short term, given the challenging industry conditions, sustained improvement is expected over the medium term with potentially uneven progress given the inherent volatility in an insurance book of this size.

Other key highlights:

• AMP Capital performed well – operating earnings increased 13 per cent reflecting strong AUM growth and tight cost control, reporting a cost to income ratio of 63.3 per cent, in advance of the 1H 14 target range of 60 to 65 per cent.
• Strong investment performance – three of the top 20 best performing Australian balanced funds are managed by AMP^[3], and AMP KiwiSaver is the top performing default KiwiSaver fund^[4].
• New Zealand achieved strong growth in profit margins – reported operating earnings of A$46 million, up 21 per cent compared with 1H 12, reflecting growth in both AUM, particularly in KiwiSaver, and in individual risk annual premium income, along with tight cost control.
• Robust AMP Bank performance – delivered A$38 million operating earnings, up 31 per cent compared with 1H 12, reflecting improved net interest margins following an increase in the use of wholesale funding and disciplined cost management.
• Planner numbers continue to grow – AMP’s planner network remains the largest planner and adviser network in Australia, demonstrating the continued attraction of AMP’s advice models, particularly as financial planner practices adapt to the new regulatory environment.  AMP now has 3,680 financial advisers in Australia, up from 3,636 at FY 12.
• Best net cashflows in wealth management for six years – increasing nearly sixfold on 1H 12 to A$1.4 billion. The combined AUM of North and AMP Flexible Super at 30 June 2013 was A$15.5 billion, up 80 per cent on 12 months ago.  All of AMP’s financial planner groups experienced good uplifts in net cashflows on 1H 12.
• North platform continued to grow strongly – with net cashflows nearly tripling to A$1,864 million for 1H 13, compared with A$636 million for 1H 12, and more AMP planners choosing to recommend the North platform to their customers.
• AMP remains number one provider of SMSF administration services – continuing to grow at twice the market rate with the number of accounts under administration increasing to 9,650 at 1H 13, from 3,000 at 1H 12, reflecting both acquisitions and organic growth.

Capital management

 AMP continues to hold a significant capital surplus, with A$1,703 million capital above minimum regulatory requirements at 30 June 2013, up from A$1,372 million at 31 December 2012.  This reflects 1H 13 retained profits, additional capital issued under the DRP, capital efficiency initiatives and more favourable investment markets.

AMP has maintained a strong balance sheet, with little change to gearing and interest cover, and has access to significant liquidity.

AMP continues to offer a DRP to eligible shareholders.  For the interim 2013 dividend, new shares will be issued and no discount will apply.

——————-

1.  AMP’s profit measures exclude MUTB’s 15 per cent share of AMP Capital’s earnings.

2.  Underlying profit is the basis on which the AMP Board determines the dividend payment and reflects the business performance of AMP. It is AMP’s preferred measure of profitability as it removes one off costs and some of the impact of investment market volatility.

3.  AMP RIL Balanced, AMP ipac Super Directions Balanced, AMP Future Directions Balanced; Chant West Top Balanced Superannuation Funds (61-80% allocations to growth assets) investment performance for one year to 30 June 2013.

4.  Morningstar KiwiSaver Survey; investment performance for one year to 30 June 2013.

——————-

Important note

Forward-looking statements in this release are based on AMP’s current views and assumptions and involve known and unknown risks and uncertainties, many of which are beyond AMP’s control and could cause actual results to differ materially from those expressed or implied.  They are not guarantees or representations of future performance, and should not be relied upon as such.

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Underlying profit was A$491 million, up seven per cent compared with A$459 million for 1H 11 [1].

Underlying profit is the basis on which the Board determines the dividend payment and reflects the business performance of AMP.  It is AMP’s preferred measure of profitability as it removes merger related costs and some of the impact of investment market volatility.

AMP’s performance against key measures was as follows:

Underlying profit:

A$491 million compared with A$450 million in 2H 11, up nine per cent.

Growth measures:

–        AMP Financial Services net cash inflow A$301 million, up from net inflows of A$94 million in 1H 11; AMP Capital external net cash outflows A$1.35 billion, compared with cash outflows of A$371 million in 1H 11[2].

–        AMP Financial Services (AFS) value of risk new business A$112 million, up 19 per cent on 1H 11.

Investment performance: 80 per cent3 of AMP Capital’s funds under management met or exceeded benchmark over the three years to 30 June 2012.

Underlying return on equity: 13.5 per cent, an increase from 12.9 per cent for 2H 11, reflecting the growth in underlying profit partly offset by a higher capital base.

The cost to income ratio for the group for 1H 12 was 46.2 per cent, down from 50.6 per cent at 2H 11.  Controllable costs were down 4.7 per cent on 2H 11.  Controllable costs are expected to be two to three per cent lower for FY 12 than in FY 11 (determined on a pro-forma basis).

Capital above MRR increased by A$503 million to A$2.05 billion at 30 June 2012.

AMP has worked to build a significant capital buffer above MRR given the current economic environment and ahead of changes in regulatory capital requirements, particularly the new capital standards for life and general insurers, LAGIC.

AMP estimates LAGIC will increase the MRR of its life company statutory funds by around A$200 million from 1 January 2013.  AMP is well positioned to manage the increase given its capital position4.

As at 30 June 2012, group gearing remained steady at 11 per cent on an S&P basis, and underlying interest cover remained high at 11.2 times.

The interim dividend has been set at 12.5 cents per share, compared with the final 2011 dividend of 14 cents per share, and will be 55 per cent franked with the unfranked amount being declared conduit foreign income.  The dividend results in a payout ratio of 73 per cent of underlying profit for 1H 12 and is within AMP’s target payout range of 70 to 80 per cent of underlying profit.

The Board believes that given ongoing investment market volatility and the continued growth in demand for more capital intensive products, it is appropriate for this period’s dividend to be struck at the lower end of the Board’s target dividend payout range.

AMP will continue to offer its dividend reinvestment plan to shareholders for the interim 2012 dividend at 1.5 per cent discount, with new shares being issued.

AMP Chief Executive Officer Craig Dunn said: “The strength of the underlying business is evident in the earnings growth, excellent cost control and continued success in AFS’ contemporary products and platforms.  At the same time, we’ve continued to strengthen our capital position in advance of regulatory change and are holding a significant capital surplus above MRR.

“The merger has substantially enhanced the competitive position of AMP and the integration continues to deliver ahead of expectations.  At the same time, we continue to invest in those parts of the market that afford the greatest opportunity for strong growth.

“Our new SMSF business unit will build scale and develop customer and adviser-friendly offers in response to the needs of the market’s fastest growing superannuation segment.

“And our partnership with MUTB has significantly enhanced our distribution footprint in Japan, and will accelerate our growth into Asia.

“We’re seeing structural change across the financial services sector as we manage the effects of market uncertainty, changing consumer preferences and the emergence of new technologies combined with the challenges and opportunities of an ageing population and significant regulatory change.

“While we’re well-advanced in our preparedness for the new regulatory framework, we’re still waiting to see the necessary policy detail that will allow us to finalise the required business changes,” Mr Dunn said.

AMP expects the one off cost to the company of implementing the Future of Financial Advice, Stronger Super and other regulatory changes over the next 12 to 18 months to be in the range A$60 million to A$75 million after tax, of which A$52 million has been provisioned at 30 June 2012.

The final costs may vary from this depending on final legislation and regulatory guidance, market practice and the future competitive landscape.

AXA integration update

The merger continues to track well with the integration expected to be complete six months earlier than planned.  Synergies are also emerging more quickly than anticipated and the synergy target has been increased to A$150 million post tax from A$140 million post tax reflecting higher than expected adviser retention.
“We’ve hit all our key targets since the integration began and a new, stronger and more competitive AMP is emerging with greater opportunities for future growth.

“We’ve completed the roll-out of the North platform to AMP and Hillross planners and AMP’s market-leading low cost retail superannuation and retirement product, Flexible Super, is now available to the AXA adviser network, together resulting in A$202 million of new inflows in 1H 2012.

“We remain very focused on our key integration objectives – to maintain business momentum, sharpen our competitive edge by delivering on synergies and drawing on the strengths of both companies, and to build a stronger future growth platform for the company,” Mr Dunn said.

Business unit update

AMP Financial Services

AFS operating earnings were A$412 million for 1H 12, up nine per cent compared with A$378 million for 2H 11.

Controllable costs in AFS were A$463 million, down 5.3 per cent compared with 2H 11, reflecting both merger synergies and a continued disciplined cost focus across the business.

AMP has continued to achieve growth across its planner businesses, offering consumers the choice of multiple brands and advice models.  Planner and adviser numbers were up 128 over the last six months in Australia and New Zealand to 4,259 at 30 June 2012.

Contemporary Wealth Management’s operating earnings were up 8.6 per cent over 2H 11, or 11.6 per cent excluding AMP Bank earnings, reflecting a 10.2 per cent fall in controllable costs over the same period.

Over the 12 months to 30 June 2012, both customer numbers and AUM doubled in AMP’s low cost retail superannuation and retirement product, AMP Flexible Super, with AUM growing from A$2.8 billion to A$5.7 billion.

North, the market-leading full service wrap platform had AUM of A$3 billion at 30 June 2012, with net cashflows more than tripling to A$636 million compared with 1H 11.

In AMP SMSF, Multiport and Super IQ (of which AMP owns 49 per cent), contributed net cash flows of A$127 million and A$287 million respectively.  No net cash flows were included from the recent Cavendish acquisition, which was completed in July 2012.  Cavendish is the largest SMSF administrator in Australia, with more than 5,000 funds and 110 employees.

AMP Bank again outperformed system growth for home loans with its mortgage book growing eight per cent to A$12 billion in 1H 2012.  This was largely funded by an increase in deposits, which were up 20 per cent over the first half.  AMP Bank’s operating earnings were

A$29 million, compared with A$30 million in 2H 11, impacted by a contraction in net interest margins.

The Contemporary Wealth Protection business unit’s operating earnings increased 25 per cent to A$134 million over 2H 11, driven by improved claims’ experience and repricing of the income protection book facilitating the reversal of a proportion of previously capitalised losses.  Excluding the effect of capitalised loss reversals, operating earnings grew by 11.8 per cent over 2H 11.  Sales growth was offset by higher controllable costs.

AFS New Zealand’s operating earnings were A$38 million, down 12 per cent on 2H 11 as a result of the challenging economic environment and increased controllable costs.  This result is despite strong KiwiSaver growth, now with 18.4 per cent of the KiwiSaver market and NZ$2.1 billion in AUM.

AMP Capital

AMP Capital’s operating earnings were A$45 million5, up 18 per cent on 2H 11 driven by higher internal AUM investment fees flowing from the merger, increased performance fees, higher seed pool income and lower controllable costs.

Controllable costs were tightly managed, falling 4.2 per cent over the six months.  A cost to income ratio of 68.2 per cent was achieved, down from 76 per cent in 2H 11, while AMP Capital continued to invest in initiatives to drive growth domestically and offshore.

AMP Capital’s return on equity was 50.0 per cent for 1H 12, up from 32.3 per cent in 2H 11.

AUM increased to A$123.2 billion up slightly on 31 December 2011 as a result of good investment performance offsetting net outflows.

AMP Capital continues to build on its international presence with the appointment of a new Asian equities team based in Hong Kong, and strong fund flows from Europe attracted by a globally recognised infrastructure investment capability.  In July 2012, AMP Capital was also successful in winning a new global REIT mandate from China’s National Social Security Fund.

The transaction to form AMP Capital’s strategic business and capital alliance with MUTB was completed on 1 March 2012 paving the way for the launch of the Global Listed Infrastructure Bond Fund.  This Fund is made available through three MUTB related, Japanese retail distribution channels, attracting A$271 million as at 10 August.  Further new funds are expected to be launched in the second half of 2012.

Outlook

As the global economy continues to work through its current challenges, AMP expects the future business environment to look very different from the past.

“Our view is that the changes in our industry are largely structural and this is shaping the strategy we’re pursuing to build and create the new AMP.

“We’re not running the business waiting for things to go back to the way they used to be.  We’re running the business for the changed environment we face today and in the future.

“We’re focused on the things we can control.  While maintaining a strong balance sheet, we’re realising the benefits from the merger, driving down costs and growing earnings by taking advantage of the growth opportunities in Australia and in selected international asset management markets,” Mr Dunn said.

[1] 1H 11 included only three months contribution from the former AXA business, whereas 2H 11 included a full six months’ contribution and so provides a more meaningful comparison. As such, most prior period comparisons for operating earnings and related ratios are made against 2H 11.

[2] 1H 11 cashflows and the value of new business have been restated to include a full six months contribution from the former AXA business.

[3] Investment performance is on a three-year rolling basis, as this is the basis on which our investment professionals are remunerated.  One year, three year and five year investment performances are shown on p. 34 of the 1H 12 Investor Report.

[4] Based on the estimated impact of LAGIC had the new capital standards applied at 30 June 2012 and could change with market movements.  Further increases in capital will be required in the life companies shareholders’ funds and the North guarantee, however, this is expected to be mitigated by management actions undertaken over the remainder of 2012.  Refer to p. 20 and 21 of the investor presentation for an update on regulatory capital reviews.

[5] After allowing for MUTB’s 15 per cent minority interest.  Prior to the deduction of MUTB’s minority interest, operating earnings were up 34.2 per cent on 2H 11.

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The memorandum of understanding with AMP follows a similar signing with major telecommunications provider Telstra in early June.

The Australia Post Digital MailBox will enable people to access their secure, individual MailBox anytime, anywhere to receive important communications such as statements and bills from service providers.

Consumers can also set reminders and make payments using any internet enabled device.

Australia Post CEO and Managing Director Ahmed Fahour said “AMP is one of Australia’s most well-known and trusted financial service companies and like Australia Post has been supporting Australians for more than 160 years.

“The Australia Post Digital MailBox would enable AMP to discuss with its customers and shareholders their finances and products with the added security of knowing their information is safe; backed by Australia Post and protected in our Australian based cloud provided by Telstra.”

AMP CEO Craig Dunn said, “Australia Post enjoys a high level of trust and confidence from the broader community and is one of Australia’s most respected brands. It’s a company that is clearly demonstrating its ability and desire to continue to evolve and seize the opportunities presented by new technology.

“We look forward to exploring how AMP and Australia Post can work together to provide our customers greater choice in how they engage with us and access their important financial records in an online secure environment.”

The Australia Post Digital MailBox will allow Australians to:

• Connect with service providers they have a relationship with – such as banks, utilities and government entities.
• Receive statements and bills, set reminders and make payments online, using any PC or mobile device, anywhere, anytime.
• Use the Australia Post Digital MailBox as a personal digital vault to upload and easily find important documents.

For businesses, which already use and trust Australia Post, the system offers:

• A flexible range of integration options to allow businesses to connect securely to their customers through the Australia Post Digital MailBox.
• A secure digital delivery service to consumers as part of an integrated physical and digital marketing and communication platform.
• The integrated hybrid product will offer better value for money than any other singular service.

Australians can register for an Australia Post Digital MailBox at auspost.com.au/digital-post.

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Mr Storrie joined AMP earlier this year as Deputy Chief Financial Officer and Group Treasurer. Prior to AMP, Mr Storrie was Chief Financial Officer for Qantas and served on its board. AMP Chief Executive Craig Dunn said Mr Storrie will be a valuable addition to the management team.

“We are very pleased Colin has accepted this appointment. His considerable financial and management experience will be a substantial benefit to our business.

“I’d like to take this opportunity to thank Paul for his outstanding contribution to AMP over many years and the role he has played in ensuring a smooth transition to AMP’s new CFO,” said Mr Dunn.

Prior to Qantas, Mr Storrie held finance and accounting roles in investment banking and the NSW Government.

Mr Storrie has a Bachelor of Commerce from the University of Wollongong, a Graduate Diploma in Management from AGSM University of NSW and is a Certified Practising Accountant (CPA).

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On a like for like basis, AMP’s underlying profit for 1H 11 was up 3 per cent on 1H 10. Underlying profit is AMP’s preferred measure of profitability as it removes some of the impact of investment market volatility and is the basis on which the Board determines the dividend payment.

Net profit before AXA merger adjustments and accounting mismatches was A$450 million3, while net profit attributable to shareholders was A$349 million3. The interim dividend has been set at 15 cents per share, the same level as 1H 10 and will be 30 per cent franked with the unfranked amount being declared conduit foreign income. The dividend represents a payout ratio of 81 per cent of underlying profit.

AMP remained strongly capitalised as at 30 June 2011 with A$2.2 billion capital above minimum regulatory requirements, up from A$1.4 billion as at 30 June 2010.

Integration update
AMP has appointed the senior management teams to lead the merged business and has determined how the two companies’ products, services and platforms will come together.

“The merger of AXA and AMP is on track and we remain firmly focused on our overriding integration objectives, which are to maintain business momentum, sharpen our competitive edge by delivering synergies and drawing on the strengths of both companies, and to build a stronger
growth platform for the combined company,” Mr Dunn said.

The synergy target has increased 17 per cent to A$140 million post tax from A$120 million, due to a range of factors, including the removal of additional IT infrastructure duplication and contract renegotiations with external suppliers. This will see a one off increase in expected project
integration costs of 9 per cent to A$310 million post tax, to be incurred over three years.

Advisers and financial planners
The merged business had 4,020 planners and advisers at 30 June 2011, making it the largest network of financial planners across Australia and New Zealand. AMP Financial Planning is Money Management’s Institutional Dealer Group of the Year, while licensees in the AXA Financial Advice Network were voted the 1st, 2nd and 3rd most attractive licensees to work with in CoreData’s 2011 annual licensee survey.

As at 31 July 2011, the merged group had 4,048 planners, a fall of six advisers over the period from 31 December 2010. Ongoing strong growth in AMP planner numbers was offset by lower recruitment for AXA advisers, particularly in the first quarter of 2011, against a background of
heightened uncertainty for AXA advisers ahead of the final merger outcome.

“We are very pleased with the AXA adviser retention post the merger. As of today, around 97 per cent of the value of the adviser network in AXA and Charter Financial Planning has been retained.

“With financial advice at the very core of what we do, the merged group continues to innovate and lead the industry in the advice space,” Mr Dunn said.

The AMP Horizons Academy, a front runner in planner education and recruitment, is now being expanded to include AXA financial planning groups. The Horizons Academy is a major source of new advisers across the AMP Group, as is AXA’s Discovery Program, which successfully
transitions salaried advisers into self-employed advisers.

AMP has recently launched one of the industry’s first scaled advice programs – My Money Choices, with more than 500 planners now offering simple, cost effective advice to address the specific needs of customers.

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