The banking arm of a major financial services company has recorded a 5 per cent rise in its mortgage book in the first quarter of the year.
AMP Bank's mortgage book increased to $17.9 billion at the end of the first quarter of the calendar year 2017 (ending March 2017), up from $17.1 billion in the last quarter of 2016.
According to the first quarter cash flows reported to the ASX yesterday, both the AMP aligned adviser and mortgage broker channels experienced mortgage book growth in Q1 17.
The deposit book increased $617 million (5 per cent) in Q1 17 relative to December 2016.
No further details of the mortgage lending performance have been made available.
Speaking at AMP’s annual general meeting yesterday, AMP CEO Craig Meller said: “AMP Bank is… a great growth story.
“In 2016, the bank’s profits were up, net interest margin was wider and we drove above system growth in both residential home loans and deposits while tightening credit criteria.
“In short, we continued to grow the business while maintaining a falling cost to income ratio and delivering a high return on capital.
“With approximately 1 per cent market share in an expanding market, we see significant further growth potential for the bank.”
However, the results are tempered by the fact that AMP had la "difficult" year in 2016.
Both the CEO and chairman, Catherine Brenner, told those at the AGM that the previous year had been hard for AMP, with the company’s performance — which saw a fall in underlying profit to $486 million and in net profit to negative $344 million — having been “disappointing” last year.
Ms Brenner said: “It was a very difficult year for AMP.
“Good performances in most of our businesses were overshadowed by a significant loss in insurance.
“Escalating claims volumes saw us take action to reset and stabilise this business. But the reset meant taking a large write-down in our insurance book, which, in turn, led to a net loss at the group level for 2016 of $344 million.
“While the insurance write downs were largely non-cash, the results impacted investor sentiment and our share price.”
However, Ms Brenner said that there were still “good results” in several areas, including AMP Bank, which delivered operating earnings growth.
She continued: “[W]hile 2016 was a challenging year in terms of performance, we did maintain a strong financial platform on which to take the business forward.
“As a board and leadership team, we are absolutely united in our commitment and resolutely determined to drive stronger growth and improve returns to shareholders in 2017 and beyond.”