Virus volatility saps AMP Capital, wealth

AMP says coronavirus-fuelled market volatility has wiped billions from its assets under management across both global investment and wealth portfolios.

The finance giant told the ASX on Thursday its Australian wealth funds under management declined 13.5 per cent to $116.3 billion in the three months to March 31, down $18.2 billion from $134.5 billion at the end of 2019. 

Average wealth assets under management declined 2.0 per cent to $131.3 billion.

AMP Capital’s total assets under management fell 5.3 per cent to $192.4 billion, down $10.7 billion from $203.1 billion in the fourth quarter of FY19.

AMP chief executive Francesco De Ferrari said his firm had witnessed some recovery since the end of the quarter but expected volatility across equities, commodities and fixed income to continue as the coronavirus crisis rolls on.

“Amid the uncertainty, I’m pleased we are showing up strongly for our clients and demonstrating the resilience of our business,” Mr De Ferrari said on Thursday. 

Net wealth cash outflows of $1.9 billion included outflows of $430 million from a number of exiting corporate super mandates, and $205 million from the impacts of Protecting Your Super legislation.

Wealth cash inflows increased 24 per cent to $1.1 billion largely due to strong inflows into the North product. 

AMP Capital net external cash flows increased to $1.3 billion from net cash outflows of $20 million compared with a year ago, reflecting strong inflows into fixed income products managed by China Life AMP Asset Management. 

AMP’s banking division grew its total loan book by $162 million to $20.8 billion during the quarter, which it said reflected continued growth in residential mortgages. 

Total deposits increased 5.4 per cent to $15.2 billion, in line with AMP Bank’s strategy to become more deposit-led funded. 

AMP’s update comes a day after fellow ASX-listed investment manager Challenger reported outflows of $2.3 billion and an 8.0 per cent decline in total assets under management for the quarter.

Challenger blamed its drop on a sell-off by superannuation funds amid the COVID-19 pandemic and the federal government’s early access to super scheme. 

AMP slumped to a full-year net loss of $2.5 billion and in February said it would not be paying a final dividend as impairments and a sagging wealth division impeded its rebuild.

It withdrew its full-year guidance last month but said it was on track to complete the sale of its wealth protection unit in June despite disruptions caused by the coronavirus pandemic.

Shares in the company were worth $1.305 before trade on Thursday and have fallen by 32 per cent in 2020 against a 22 per cent decline for the benchmark ASX/200. 

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