AMP Bank has seen a significant increase in the use of AMP-aligned financial advisers as a distribution channel for the lender’s residential mortgages.
The bank’s 2014 profit results, released yesterday, show that the AMP-aligned adviser channel now contributes 25 per cent of AMP Bank’s new mortgage business, up from 19 per cent in FY13.
AMP grew its total loan book by $1.17 billion to $14.5 billion in FY14, an increase of 8.8 per cent on FY13.
“Residential mortgage competition remained intense in the period, with continued market-wide discounting,” the lender noted.
“AMP Bank’s focus on pricing enhancements and productivity from key channels contributed to deliver above-system residential mortgage book growth of A$1.117m (9 per cent) in FY14 to $14 billion,” the bank said.
“Strong growth was delivered through both the broker and AMP-aligned adviser channels.”
Owner-occupied loans made up 62 per cent of the bank’s mortgage portfolio at 31 December 2014, while investment property loans were 38 per cent.
Meanwhile, practice finance loans grew by $52m (11 per cent) in FY14 to $518m, despite uncertainty regarding Future of Financial Advice legislation during the year, the bank noted.
“The practice finance loan portfolio reflects AMP Bank’s commitment to supporting the growth and development of the financial advice businesses of the AMP group,” it said.
“AMP Bank’s credit policy remains conservative and has not been relaxed to achieve growth.”
Overall, AMP Bank’s operating profits were up 10 per cent to $91 million in 2014 from $83 million in 2013.
Total revenue increased by 12 per cent in 2014, driven by growth in loan portfolio and improved net interest margin, the bank said.