AMP shares rebound from early drop as UBS sees second-half improvement
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More news: Shares in AMP wiped out early losses to trade higher after the wealth manager reported a mixed first-half result this morning.
AMP shares were up 2.6% to $1.71 at 2:10pm AEST, having dropped more than 3% in early trading.
The company reported statutory net profit after tax of $98 million for the first-half period, compared to consensus estimates of $103 million. Underlying profit of $131 million also missed market forecasts of $138 million.
However, UBS analysts said AMP Bank's net interest margin (NIM) outlook was a positive, guiding to a flat second-half at 130 basis points.
What they said: "With FY25 revenue margin and overall cost guidance reaffirmed and better bank NIM, we think the market will largely look past a weaker 1H to an improved 2H outlook," the analysts said.
AMP posts drop in half-year profit as litigation costs weigh
The news: Wealth manager AMP has reported a 4.9% slide in half-year net profit after tax to $98 million, as planned business simplification and litigation costs weighed on its bottom line. This is down from $103 million in the prior corresponding period.
The company also confirmed that long-serving non-executive director Andrea Slattery will retire from the board after a six-year term. AMP has appointed former KPMG and Colonial First State executive Linda Elkins to the AMP and AMP Bank boards, effective 1 September.
The numbers: Underlying net profit rose 9.2% year on year to $131 million. There were underlying increases at AMP's platforms business (+7.4% to $58 million), AMP Bank (+2.9% to $36 million) and its New Zealand wealth management arm (+11.8% to $19 million). AMP's superannuation and investments was steady year on year at $34 million.
However, first-half litigation and remediation costs totalled $11 million, compared to $2 million in the prior corresponding period. Business simplification costs were $21 million, compared to $43 million a year earlier.
The group will pay an interim dividend of 2 cents per share, level with last year's payout.
The context: AMP said litigation costs impacted profit during the period, after hearings for a class action over alleged excessive superannuation fees opened in May.
The company also confirmed last month that it will defend two new legal proceedings, including another class action against its superannuation business NP Super.
