AMP gives up on selling its NZ wealth arm

AMP has abandoned plans to sell its New Zealand wealth management business following disruption caused by the Covid-19 pandemic.

The company said it held discussions with interested parties regarding the divestment, but the offers received did not meet its expectations.

New Zealand wealth management will be retained and will focus on growing the business in existing markets, the company said in a statement to the NZX.

In February, the Australia-based financial services company said the sale process was well underway and management were actively involved in talks with potential buyers.

At the end of March, the company said the process was still ongoing and a further update would be provided at or before results for the first half-year.

Selling the local wealth management arm had been part of a three-year strategic plan AMP announced last year, to simplify the business model in an attempt to fuel higher returns. The company was targeting cost savings of A$300 million ($320m) by the 2020 full-year.

In its 2019 annual report, the company said the sale of the New Zealand assets would help fund “reinvention” of wealth management in Australia and the maintenance of growth momentum in AMP Capital.

The sale of AMP Life is expected to proceed and be completed by June 30. That has been held up by the Reserve Bank of New Zealand’s requirement for buyer Resolution Life to ring-fence the Kiwi assets for the benefit of local policyholders.