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AMP slashes dividends after profits crash

Business

AMP has flagged a 96 per cent drop in full-year profit and a drastically smaller final dividend after confirming it will set aside another $200 million to cover the cost of customer remediation related to issues heard at the banking royal commission.

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The wealth manager expects net profit attributable to shareholders for the 12 months to December 31 of about $30 million, it said in a statement on Friday.

That compares to $848 million in 2017.

The performance means AMP will slash its final dividend from 14.5 cents to 4.0 cents, a move likely to anger shareholders who already delivered a first strike on remuneration last year.

The news dragged AMP shares to within just four cents of their all-time low of $2.24 in early trade on Friday.

At 1043 AEDT, they were still down 20 cents, or 7.87 per cent, at $2.34.

The company faces the prospect of a board spill at May’s annual general meeting, with furious shareholders having voted against last year’s remuneration report shortly after revelations of AMP’s misconduct were made public.

AMP, which lost its chief executive and chairman following its mauling at the royal commission for issues including lying to regulators and charging fees for no advice, reports its full-year results on February 14.

AMP had already given an estimate of the latest provision but has now firmed up the pre-tax amounts of $186 million, for remediation program running costs, and $14 million, for lost customer earnings in the second half.

Underlying profit – which strips out various one-off costs- is estimated to come in at about $680 million, still down 35 per cent on 2017’s $1.04 billion.

AMP shares were worth about $5.50 as recently as March last year.

– AAP

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