AMP won't commit to regular dividends yet
AMP isn't yet in a position to resume regular payouts to shareholders, but will share with them most of the proceeds of its asset management business, its new chief executive says.
The wealth manager over the past year or so has sold off the business formerly known as AMP Capital in pieces to Dexus, Macquarie and DigitalBridge for a total of roughly $2 billion.
CEO Alexis George, who was appointed to the role last August, told AMP's annual general meeting on Friday that it planned to return the majority of the funds to shareholders through both share buybacks and capital returns.
"At the conclusion of these activities the dividend policy will be reviewed," she said.
"However, as we are heading into more uncertain times, I want to ensure we have a robust capital management approach and a strong balance sheet."
AMP chairwoman Debra Hazelton added that "regular dividends will come on the basis of our profitability".
In her first AGM as CEO, Ms George indicated she was committed to turning around the 170-year-old business after its reputation was badly tarnished by the findings of the 2018 financial services royal commission.
A slimmed-down AMP's biggest opportunity is in banking, where AMP's home loan business has been outperforming competitors in the last two quarters, Ms George said.
AMP is committed to providing financial advice, but the current regulatory settings mean it is very difficult for licensees to be sustainable and profitable, Ms George said.
"The business has been running at a substantial loss and is projected to do so in 2022," she said.
Ms George said that AMP's executive team was doing an enormous amount of work to simplify and streamline its business.
AMP managed to avoid a "first strike" on executive pay although 20.2 per cent of shareholders voted against its renumeration report. If 25 per cent had voted against it, as they did in 2020, that would have triggered a staged process that could have eventually triggered a board spill.
AMP shares were down 2.6 per cent to $1.11 at 1358 AEDT. They're up 9.9 per cent this year after four straight years of declines.