Superannuation, financial advice, and banking products group AMP [ASX:AMP] told the public today that it has experienced continuous growth in its bank, Australian Wealth Management (AWM) segment and improved its cash flow for Q1 FY23.
Assets under management (AUM) for the group’s AWM segment increased by $2 billion. The group churned through $600 million in net outflows for the quarter — an improvement on the $900 million experienced in the period before.
AMP says its results in the March quarter were gained through a positive period in investment markets, though it did experience some offsetting from certain items.
The financial group was trading at $1.09 at the time of writing, a gain of 11% in the month even as it fell 17% so far in 2023.
Compared with its sector, it is 10.5% up and 5% above the ASX 200:
Source: tradingview.com
AMP shares banking, AUMs and cashflow highlights
The financial services provider gave a run-down of its many segments, including its banking services, wealth management advice and investing division and overall business cash and capital health.
AMP reported that its bank’s total loan book grew by $200 million to $24.2 billion in the March quarter, with residential loan growth up 0.3 times to the end of February.
Through March and April, AMP spotted a change in momentum for the better for both its loan applications and growth.
The bank secured $750 million through a Residential Mortgage-backed Securities deal even as deposits decreased in the quarter by $0.03 billion.
AMP’s bank net interest margin is still in keeping with fiscal 2022.
AMP Australian Wealth Management posted net outflows of $600 million in the quarter, down from $900 million in the prior period.
The group also said AUMs had increased by $2 billion to $126.2 billion.
AWM net cash outflows improved by more than 30% from the prior corresponding period, driven by the stabilisation of Master Trust outflows.
North inflows from independent financial advisers were said to have grown 30% on Q1 FY2022.
Another win was reported in New Zealand Wealth Management’s KiwiSaver net cashflows, which also increased to $44 million ($10 million in Q1 FY22).
Outlook for AMP
The company commented that the results reflect ‘positive investment markets, partly offset by net cash outflows and pension payments’.
AMP sees economic conditions remaining challenging for borrowers, but its bank credit remains strong. It did flag some ‘signs of stress’ for the book, asserting the group remains vigilant and is working with its customers to smooth out any issues.
Chief Executive of AMP, Alexis George, said:
‘We continue to take an active approach to managing the Bank’s loan book, being disciplined in our growth in a highly competitive market to maintain strong credit quality and margin. We are conscious of the impact of rising interest rates on customers and continue to focus on providing competitive loan and deposit rates.
The completion of the sale of the final AMP Capital business last month has further sharpened our focus on driving the performance of our banking and wealth management businesses. At the same time, we are progressing our capital and balance sheet review, as well as determining the appropriate operating model and cost base for the business going forward.’
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Regards,
Mahlia Stewart,
For The Daily Reckoning
