Higher costs, earthquake hit AMP Financial's earnings

AMP Financial Services New Zealand has reported a 32 per cent fall in first-half profit while noting strong cash flows into KiwiSaver, offset by a soft retail investment market.

The financial services firm, which has merged with AXA, reported an operating profit of $28 million for the six months to June 30, down from $41 million in the same period last year.

AXA New Zealand recorded a profit for the quarter, since the merger, of $15 million. This included non-recurring gains when AMP and AXA aligned assumptions.

Earnings were affected by the Christchurch earthquake, assumption and modelling changes, higher costs and experience losses.

Last year there was also a $7 million one-off gain from lower corporate tax rates.

Net cash flows increased 4 per cent and during the period AMP KiwiSaver funds under management reached $1 billion.

Operating expenses increased 13 per cent to $35 million, driven by higher marketing, employment and IT costs. There were also costs to support advisers in Christchurch. The business recorded a 3 per cent increase in risk annual premium income.

- NZPA