AMP book grows, group sees outflows

AMP Ltd has provided an assets under management (AUM) and cash flows update for the first quarter of 2021 (Q1FY21 covering January to March 2021), which showed that AMP Bank’s loan book totalled $20.8 billion, up from $20.6 billion in Q4FY20.

The bank attributed the growth to an uptick in owner-occupied loans in a “highly competitive” market.

According to the Australian Prudential Regulation Authority’s monthly authorised deposit-taking institution statistics, as at 28 February 2021, AMP Bank’s loan book totalled around $18.4 billion. Owner-occupied loans totalled around $13.16 billion, while investment loans totalled around $5.24 billion. 

However, the APRA data does not include the loan book figures provided in AMP’s quarterly cash flow update.

AMP Bank has completed its home loan repayment pause program, which it made available to support borrowers during the coronavirus pandemic.

On the other hand, AMP Bank’s total deposits shrank from $16.1 million in Q4FY21 to $16.0 billion, which AMP Bank said was in line with its strategy to “optimise its funding mix”.

The deposits-to-loan ratio dropped from 78 per cent in Q4FY20 to 77 per cent in Q1FY21.

AMP’s Australian wealth management division AUM increased by $1.6 billion to $125.7 billion during Q1FY21, which the group said reflected stronger investment markets.

However, the division recorded net cash outflows of $1.5 billion in Q1FY21, including cash inflows of $5.2 billion, largely driven by $3.6 billion cash inflows on the North platform, and cash outflows of $6.7 billion, including $48 million in regular pension payments to clients in retirement and the exit of a corporate super mandate.

AMP Capital’s AUM declined by 1.7 per cent to $186.5 billion from $189.8 billion in Q1FY21, reflecting net cash outflows for the period of $2.9 billion.

AMP Capital reported external net cash outflows of $1.3 billion in Q1FY21, which it said was driven primarily by fixed income outflows as well as planned divestments of assets in infrastructure equity closed-end funds.

The New Zealand wealth management division reported that its total AUM decreased to $12.2 billion from $12.4 billion in Q4FY20, which it said was in part due to the exit of a large corporate superannuation fund.

Net cash outflows of the division jumped from $56.0 million in Q1FY20 to $102.0 million, which the group attributed to increased competitor activity, exit of a corporate superannuation client, and the ongoing impacts of the coronavirus pandemic.

Commenting on business performance, outgoing AMP CEO Francesco De Ferrari said that it has remained “resilient” during the first quarter of 2021 as the group progressed on its simplification strategy.

He said: “We saw an encouraging performance in AMP Bank, performing solidly in a highly competitive market with sustained loan book growth.

“It’s also pleasing to see clients impacted by COVID-19 are getting back on their feet with all home loan pauses now lifted.”

“In Australian wealth management, our cash flows are showing underlying signs of improvement, with a reduction in outflows from corporate super mandates and a reduced impact from Protecting Your Super legislation.

“We supported clients through the period with $448 million in pension payments, which are reflected in cash outflows.”

He concluded: “We are accelerating change within AMP, having made strong progress on addressing our legacy issues, including our client remediation program, which is close to 90 per cent complete. We remain focused on delivering critical priorities to progress our transformation over the next quarter and continue positioning the business for future growth.”

AMP revealed earlier this year before releasing its full-year results for the year ending 31 December 2020 that it had been informed by US-based global asset manager Ares Management that it no longer intended to proceed with its non-binding indicative proposal for 100 per cent of AMP of $1.85 per share.

[Related: AMP Bank earnings sink 30%]