AMP New Zealand lifts annual earnings

AMP's New Zealand financial services division lifted annual earnings 1 per cent. Photo / 123RF

AMP's New Zealand financial services division lifted annual earnings 1 per cent as a cost-cutting exercise and increased funds under management fattened margins, but the local division is still among units being reviewed by the Australian wealth manager.

Operating earnings rose to $135 million in calendar 2017 from $134m a year earlier with a 6 per cent cut in controllable costs to $80m from restructuring its local business and simplifying products, the local unit said in a statement.

The Kiwi division's earnings were boosted by a 10 per cent gain in wealth management profit to A$44m ($47.5m), with funds under management up 10 per cent to $17.3 billion, reflecting the upbeat market and net cash flows of $220m.

Last year AMP said it was reviewing its Australian wealth protection, New Zealand, and mature units, with all alternatives on the table, and group chief executive Craig Meller today said it's talking to a number of interested parties.

"While the portfolio review is yet to be concluded, AMP expects to be in a position to update at or before its AGM," he said.

The New Zealand division accounted for about 12 per cent of AMP's A$1.07b of operating earnings. The group posted a profit of A$848m in 2017, turning around a loss of A$344m a year earlier, due to increased earnings from its AMP Capital funds management and AMP Bank divisions, and a return to profitability from its wealth protection division.

Australian financiers have been carving out their wealth management and insurance businesses over the past year, with Australia & New Zealand Banking Group sounding out buyers' appetite for its wealth management unit and Commonwealth Bank of Australia selling its CommInsure and Sovereign units to AIA Group for A$3.8b.

AMP's board declared a final dividend of 14.5 Australian cents per share, franked at 90 per cent, and taking the annual return to 29 Australian cents. The dual-listed shares were unchanged at $5.41 on the NZX, having increased 3.6 per cent over the past 12 months.