The Business Times

AMP’s profit drops as margin pressure squeezes banking division

Published Thu, Aug 11, 2022 · 07:06 AM

AUSTRALIAN wealth manager AMP said on Thursday its half-year profit fell by nearly a quarter as margin pressure weighed on the performance of its banking division.

Net interest margin at AMP Bank fell to 1.32 per cent in the first half of the fiscal year, from 1.62 per cent a year earlier, dragged down by growth in fixed-rate loans – which are less profitable.

Margins, however, started to recover thanks to interest rate hikes from the Reserve Bank of Australia, the company said.

AMP has been trying to repair its reputation since 2018 when a public financial sector inquiry exposed systemic wrongdoing at the company, including charging customers for services it did not provide and misleading regulators.

For the six months ended June 30, the 173-year-old company reported an underlying net profit after tax (NPAT) of A$117 million (S$113.5 million), compared with A$155 million a year ago.

AMP Bank’s underlying NPAT fell 45.2 per cent to A$46 million, while net cash outflows from the firm’s flagship fund management arm eased to A$2.7 billion, from A$4 billion a year earlier. REUTERS

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