AMP planning fightback after $2.3b loss
AMP has posted a $2.29 billon first-half loss on the back of a $2.35 billion impairment ahead of a large-scale overhaul of its slimmed down operations.
The banking and financial services company, which has plummeted in value since being hammered at last year’s banking royal commission, has announced a $650 million capital raising to help pay for a $1.3 billion, three-year transformation program.
The transformation will not include its life insurance business, which it has agreed to sell to the UK’s Resolution Life in a revised deal worth $3 billion.
AMP will receive $2.5 billion in cash and a $500 million stake in the holding company that will own AMP Life.
The Reserve Bank of New Zealand last month scuppered an earlier $3.3 billion deal due to concerns over benefits to the company’s NZ policyholders.
AMP had flagged it would be forced to cut its interim dividend as a result of the delay and yesterday confirmed it would hold its payout until the deal is complete.
While impairments weighed heavily on the company’s first-half result, it said earnings growth at AMP Capital and a resilient AMP Bank performance had delivered an underlying firsthalf net profit of $309 million.
Following consultation with shareholders, chief executive Francesco De Ferrari’s potential bonuses have also been cut by as much as $4.6 million to reflect the company’s diminished value since his appointment was announced.
Mr De Ferrari had been in line to receive $16 million worth of so-called buyout and recovery incentives, the latter dependent upon a recovery in the company’s shares, but the amount was based on a $3.44 share price ahead of his appointment a year ago.
AMP has adjusted the targets and incentives to reflect a share price decline to $2.45 just before he started in January, dropping the value of the to $11.4 million.