A non-major has released its results for the 2018 financial year, citing an increase in home loans but a serious blow for its overarching group.
AMP Capital’s earnings were below that of the year before and its cash outflows were substantially higher, which it put down to a range of factors including the reputational impact of the Royal Commission.
However, AMP Bank saw growth in residential mortgages and a reduction in deposit costs, which drove a 5.7% increase in operating earnings to $148m. Residential loans increased 3% to $19.5b, but it said loan growth was affected during the second half of the financial year by competition in the “subdued” housing market, as well as regulatory limits and conservative liquidity management.
Its FY18 report said residential mortgage competition was particularly apparent in the owner-occupied principal and interest market.
As part of its priorities for 2019, AMP Capital said it wanted to drive growth at AMP Bank by delivering solutions through the broker channel.
AMP chief executive Francesco De Ferrari said, “2018 has been a challenging year for AMP. Our core businesses have delivered resilient results, with continued growth in AMP Capital and AMP Bank offsetting the headwinds faced in Australian wealth management.
“The Royal Commission has been a confronting but valuable experience for the financial services industry and has served as a catalyst for change at AMP. We have undertaken board and leadership renewal, accelerated client remediation and sharpened our focus on delivering better value to customers including reducing fees on our MySuper products.
“2019 will be a transitional year as we prioritise the complex legal separation from the businesses sold to Resolution Life, and deliver on our commitments to remediate advice customers and strengthen our risk management, governance and controls. Delivery on these priorities is a precondition to set a strong foundation for future growth.”