AMP sinks as neobank deal and margin forecast fail to impress
Chief executive Alexis George conceded the market reaction to a new partnership with a UK neobank was disappointing, as shares in the AMP fell by up to 15%.
The decline of the storied financial services house AMP, one of the original Six Pillars of the Australian financial system, has led to the unusual situation where a former life insurance giant is currently making most of its money from banking.
In the group’s half year profit, AMP Bank contributed $57 million of the $112 million net profit, up 24% on the previous year.
Today AMP launched a new iteration of its bank, a purely digital partnership with a UK neobank, Starling, pitched at the smaller end of the small business market. Initially, it won’t lend money but focus on deposits and transactions. The aim is to diversify funding for the bank.
The announcement, the centrepiece of a broader investor update, didn’t go well. By midday shares were off 13% when other banks were plus or minus 1%. Selling volumes were high.
