Costs a burden in AMP figures

Litigation and transformation costs have weighed down AMP, which posted a $4m second-half profit, taking full-year statutory returns to $265m, as it flagged a pivot to its banking arm as chair Debra Hazelton revealed she would resign.

Unveiling its full-year earnings on Wednesday, AMP said its $265m full-year statutory profit had benefited from a $245m gain after the sale of the AMP Capital and Super Concepts business. But it said the result had been offset by litigation and remediation costs, which topped $159m.

AMP secured a deal with a group of advisers, signing a $100m settlement partly funded by a $50m provision in the first half of the financial year.

It said its underlying profits after tax topped $196m, up 6.5 per cent on the $184m in 2022. It flagged plans in November to spend $60m on a digital transformation in the next two years. Its bank had $93m in underlying profits in the year, down on the $103m in the 2022 financial year, due to margin compression and growth moderation.

The platforms business notched up $90m in underlying profits.

Chief executive Alexis George said it would now drive profitability from its banking arm, the Master Trust, Advice Platforms, and the New Zealand business.

Ms Hazelton, who stepped in as chair in mid-2020, told investors on Wednesday she would resign in April, with risk and compliance committee chair and veteran banker Mike Hurst to replace her.

“I want to wish Mike, CEO Alexis George and the entire board every success as AMP consolidates on its rebuild,” she said.

Ms George said the increased focus on its banking arm was a bid to diversify the group, which has been dominated by retirement and wealth operations in the wake of the sale of its life business in 2020.

AMP said its bank faced lower margins in the coming year thanks to market competition and margins were expected to shrink to between 1.1 and 1.15 per cent in 2024, down on the 1.27 per cent report in the 2023 financial year.