Bank plans to strengthen direct channel

by Madison Utley09 Aug 2019

During its half year debrief held yesterday, a non-major bank announced that the “rebalancing of [its] client channels” will be a priority moving forward.

According to AMP CEO Francesco De Ferrari, the decision to drill down on its direct channel is “truly client centric and client led.”

“We need to get closer to our own clients and grow our direct channel. So, while we’re maintaining our broker and corporate super relationships, we need to reshape our aligned network. We need to invest heavily in building our direct and digital service proposition.

“This will allow us to capture a greater share of the advice revenues,” he said.

The results also highlighted the continued mortgage growth, despite the overall slowing in the housing market felt over the last six months.

AMP’s total loan book grew to $20.2bn, up from the $20.1bn reported in its first quarter report.

While 90-day mortgage arrears charted an increase, they remained below the industry average of 1%.

De Ferrari termed 2019 a “transition year” for the bank.

The “challenging” first half was consumed with eliminating risk from the business, costing the bank $2.35bn in impairments to address legacy issues and “position AMP for the future.”

De Ferrari also unveiled a new strategy to “reinvent AMP” as a contemporary wealth manager, with a three-year investment program to help address lingering issues and fund future growth.

“We are reinventing our Australian business to deliver a proposition that fulfils client needs with whole-of-wealth solutions including banking,” he said.

“The capital raising and the AMP Life sale will provide the funds to implement immediately our transformational strategy, which creates a simpler, higher-growth and higher-return AMP that’s focused on clients and ensures that our balance sheet will be unquestionably strong.

“This strategy will put AMP on the path to sustainable, long-term value creation,” he concluded.