AMP - Stock Update

6 May 2022

Sector: Financials

AMP came out with its Q1 22 AUM and cash flow update yesterday. Largely there was no new information with regards to timing of capital return.

The most notable updates were:

AMP Bank

Mortgage growth of $531m
Deposit book growth of $1,717m
Total deposit funding up to 86% in AMP Bank

AMP Australia Wealth Management

Net-flows of -$1.1 billion
Closing AUM of $153.7 billion
Loss of Woolworths Super mandate of -$4 billion expected in 1H23

NZ Wealth management

Net-flows -$62m
Closing AUM -$11.3 billion

AMP stated within their asset sale ASX announcement that they believe it was a strong outcome for stakeholders to go ahead with the sales transaction (discussed in previous sales note and most recent research report). It was also stated that AMP aim to deliver most of the capital back to shareholders. Primary avenues to return capital to the shareholders were indicated to tentatively be an on market buy back and a capital return.

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Company Overview

AMP is a financial services company that operates a variety of products such as superannuation, investment products and banking. AMP is moving forward toward becoming a more focused organisation as a result of the upcoming demerger which supports the investment thesis of a BUY rating. Risk remains around the demerger process although notably it is a display of the group attempting to reinvigorate itself.

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