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AMP Limited provides Q1 20 AUM and cashflows update

Thursday 23rd April 2020

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– AMP Capital total assets under management (AUM) reduced to A$192.4 billion (Q4 19: A$203.1 billion). Average AUM for the Q1 20 period increased from A$202.7 billion to A$203.4 billion.

– AMP Capital net external cashflows increased to A$1.3 billion from net cash outflows of A$20 million in Q1 19, reflecting strong inflows into fixed income products managed by China Life AMP Asset Management.

– Australian wealth management AUM as at 31 March 2020 reduced to A$116.3 billion (Q4 19: A$134.5 billion), primarily reflecting COVID-19-related market movements. Average AUM in Q1 20 was A$131.3 billion.

– Australian wealth management net cash outflows of A$1.9 billion includes outflows of A$430 million from a number of exiting corporate super mandates and A$205 million from the impacts of Protecting Your Super legislation. Excluding these impacts, Australian wealth management net cash outflows are A$1.3 billion.

– Australian wealth management cash inflows increased A$1.1 billion (24 per cent) largely due to strong inflows into North.

– AMP Bank’s total loan book grew by A$162 million to A$20.8 billion and deposits grew by A$773m to A$15.2 billion.

AMP Chief Executive Francesco De Ferrari said:

“During this time of uncertainty, we have focused on supporting our clients whilst working to continue to execute on our strategy. We’re responding to a record level of client enquiries for advice and support as people weigh up important financial decisions.

“Markets in Q1 were extremely volatile particularly in March, with significant falls in equities, fixed income and key commodities impacting our assets under management. We have seen some recovery since the quarter-end, but expect market volatility to continue and the economic impact of the pandemic to emerge over the remainder of the year.

“In Australian wealth management, our North platform continued its strong growth. North net inflows were higher against Q1 19, and drove a better performance across our retail platforms, with net outflows reducing. The Protecting Your Super legislation and the expected exit of corporate super mandates in the quarter impacted overall net cash outflows for the business.

“AMP Capital saw strong external cashflows, particularly into fixed income products through our asset management partnership in China. Our infrastructure teams are also seeing opportunities for further investment, particularly in infrastructure debt. AMP Bank increased its mortgage lending and grew deposits while also offering relief measures to clients in hardship.

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

Business unit results

AMP Australia

Australian wealth management

– Australian wealth management average AUM declined 2 per cent to A$131.3 billion from A$134.0 billion in Q4 19. AUM as at 31 March 2020 declined 13.5 per cent to A$116.3 billion (Q4 19: A$134.5 billion), reflecting weaker investment markets in March 2020.

– Net cash outflows of A$1.9 billion in Q1 20 include:

o Cash inflows of A$5.8 billion, increased from A$4.7 billion in Q1 19, driven by a 41 per cent increase in flows on North platform, including A$400 million from external financial advisers.

o Cash outflows of A$7.7 billion included A$563 million in regular pension payments to clients, the expected exit of a number of corporate super mandates representing A$430 million, and A$205 million from the impacts of Protecting Your Super legislation.

AMP Bank

– AMP Bank’s total loan book grew A$162 million to A$20.8 billion during Q1 20, reflecting continued growth in residential mortgages.

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

– To support clients experiencing financial hardship as a result of COVID-19, AMP Bank is offering clients the option to pause home loan repayments for three months, with the option to extend for a further three months.

AMP Capital

– AMP Capital average AUM increased to A$203.4 billion from A$202.7 billion in Q4 19. AUM as at 31 March 2020 declined 5.3 per cent to A$192.4 billion (Q4 19: A$203.1 billion), primarily due to weaker investment markets. A higher portion of external AUM is exposed to foreign currency, which benefited from the depreciation of the Australian dollar.

– AMP Capital net external cashflows increased to A$1.3 billion (Q4 19: A$20 million net external cash outflows), primarily driven by strong inflows in China Life AMP Asset Management, across money market funds and fixed income products as investors moved to defensive asset classes.

– During Q1 20, outflows included the return of A$300 million to investors in the AMP Capital Infrastructure Debt Fund II and III, delivering strong performance outcomes for clients.

– An additional A$8.1 billion in committed capital remains available for real assets investment of which A$1.6 billion is ear-marked for transactions yet to close. Committed capital will be reflected in AUM when transactions close. AMP Capital continues to pursue quality infrastructure investment opportunities in the market.

New Zealand wealth management

– New Zealand wealth management average AUM increased 1.2 per cent to A$12.1 billion in Q1 20. AUM as at 31 March 2020 declined 9.8 per cent to A$11.1 billion (Q4 19: A$12.3 billion) reflecting weaker investment markets.

– New Zealand wealth management net cash outflows were broadly stable at A$56 million (Q1 19: A$52 million net cash outflows).

– Cash inflows into KiwiSaver remain strong at A$163 million in Q1 20 (Q1 19: A$162 million).

Source: AMP Limited

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