Financial services platform AMP [ASX:AMP] saw its shares topple...

Financial services platform AMP [ASX:AMP] saw its shares topple 14% to $1.13 after announcing underlying net profit after tax (NPAT) had fallen from $280 million in 2021 to $184 million in the last full-year report.

It appeared the company’s promise of a final dividend at 2.5 cents a share (20% franked) was not enough to placate investors today. Nor was the report of $387 million in statutory net profit after tax (which had improved on the $252 million loss taken the prior year).

AMP’s stock has not had a good start to the year, having dropped 16% in the last month and by more than 17% in the past week alone.

Over the longer term, though, AMP has shown more resilience, having gained more than 11% over the past 52-week cycle.

Source: tradingview.com

AMP’s 2022 highlights fail to delight

The company reported underlying net profit after tax (NPAT) of $184 million, significantly less than the $280 million in 2021.

Assets under management were flagged under investment losses from clients in the year. This, combined with ever-present market volatility, caused AMP to lose $5.3 billion in net cash.

The group’s core wealth management business continues to struggle after copping a blow from the Hayne royal commission back in 2019 when it was exposed for questionable policies charging customers for services it had no intention to provide, along with false statements made to regulators regarding its operations back in 2019.

Even so, the company still decided to give a final dividend to its shareholders of 2.5 cents a share at a 20% fully-franked rate.

Statutory NPAT came to $387 million in the year, which was an improvement on the prior year’s $252 million statutory loss, thanks to gains made in the sale of its infrastructure debt platform.

AMP’s bank residential mortgage book grew $2 billion, improving the net interest margin in the second half of the year and lending some credit strength to its loan book amid cash rate increases.

Alexis George, AMP’s CEO, stated:

‘Our profit for the year reflects the challenging economic environment we are facing, as well as strategic decisions to reprice our offers in Master Trust and Platforms to deliver both highly competitive and attractive offers.

‘We are seeing positive momentum around the transformation of our Advice business, where we have more than halved the losses, and our key growth businesses — AMP Bank and Platforms — are starting to benefit from the investments we are making in those businesses.’

The group continues to progress its capital management program of $1.1 billion, including $267 million of its targeted $350 million on-market share buyback completed at the end of the year.

Discontinued operations related to AMP Capital alleviated the company’s cost base by $54 million, and the group says it will remain focused on disciplined cost management across its sectors.

Regards,

Mahlia Stewart,

For The Daily Reckoning

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