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Australia's AMP sells insurance businesses for A$3.3b
[SYDNEY] Australia's AMP announced Thursday the sale of its insurance businesses to Resolution Life for A$3.3 billion (S$3.22 billion) as the financial services giant restructures following a misconduct scandal.
AMP said the sale of the insurance arms in Australia and New Zealand, and plans to divest New Zealand wealth management businesses via an IPO, aimed to reshape the company "as a simpler, more focused group".
The moves are also designed to "strengthen AMP's balance sheet and provide strategic flexibility," it said in a statement.
The sale to Resolution Life, a global wealth protection company, is subject to regulatory approval and expected to complete in 2019.
AMP was a key target of a royal commission of inquiry earlier this year into abuses in the Australian financial services sector, accused of a raft of misconduct including charging clients for advice they never received.
The commission heard that AMP's senior executives intervened in the drafting of a supposedly independent report drawn up for the inquiry.
The firm also admitted misleading the national stock market watchdog about the client fee scandal, which affected some 15,700 clients between 2009 and 2016.
The company's CEO and chairman both resigned earlier this year in the wake of the scandal, and AMP reported in August a 74 per cent plunge in half-year profits, due in part to an after-tax provision of A$290 million to compensate affected clients.
AMP in July announced a program to repair its reputation via a complete review of its operating procedures and portfolios.
Acting CEO Mike Wilkins said Thursday's moves were a key part of that review.
"Delivering the right outcome for customers, shareholders and employees has been our focus throughout the portfolio review," he said.