AMP shares dip after admission

SYDNEY: AMP shares have almost returned to their record low after the financial services provider confirmed it is facing $A778 million ($NZ828 million) in remediation costs over its feesfornoservice scandal and is expanding its internal investigations.

Shares in the firm slipped as much as 5.7% in early trade yesterday to sit just A1c above the record low of $A2.28 to which they sank last month.

The selloff came a day after acting chief executive Mike Wilkins said AMP had initially underestimated the scale of its feesfornoservice problems when they were discovered in 2016.

AMP confirmed the $A778 million pretax estimate in a state ment to the ASX yesterday, laying out $A318 million in costs and lost earnings for which it has not yet provisioned.

Australia’s largest wealth manager at one stage feared the programme could end up costing more than $A1 billion, but said the figure was now lower because quickly.

‘‘The figure of $[A]1.185 billion referenced in the royal commission was an early estimate of the total programme costs (now estimated as $[A]778 million),’’ AMP said in the statement.

‘‘This estimate was based on a

it was acting more nineyear timeframe for remediation that was rejected as unacceptable for customers by management and the board.’’

AMP also confirmed it was now investigating the provision of general advice to corporate super plans before the Freedom of Financial Advice reforms of 2013, but that it did not expect the amounts involved to be material.

The share price had risen to $A2.35 by by the close of trade yesterday. — AAP