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27 October 2017
AMP Limited provides Q3 17 cashflows update

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  • Group delivers solid business performance, in line with guidance metrics.
  • Australian wealth management (AWM) assets under management increased A$211 million during Q3 17 to A$125.3 billion.
  • AWM net cash outflow of A$243 million reflects high levels of discretionary super contributions brought forward into Q2 17 ahead of 1 July 2017 changes to non-concessional caps.
  • Net cashflows on AMP North platform of A$1.3 billion in the quarter, up 13 per cent on Q3 16.
  • AMP Capital net external cashflows of A$616 million driven by strong cashflows from China Life AMP Asset Management (CLAMP) and real assets.
  • AMP Bank’s total loan book grew to A$19.2 billion during the quarter.
  • Australian wealth protection performance stable with experience tracking in line with expectations.

AMP Chief Executive Craig Meller said:
We have made good progress in the quarter and the business is tracking in line with expectations.

In Australian wealth management, as expected, cashflows reflect the high level of discretionary super contributions brought forward into Q2 17, ahead of 1 July 2017 changes to non-concessional caps.

AMP’s award-winning North platform continues to perform strongly, with cashflows increasing during the quarter.

AMP Capital has had a strong third quarter, increasing external net cashflows as well as putting investors’ money to work in its core infrastructure and real estate portfolio, including securing a record US$4.1 billion in commitments for its infrastructure debt strategy.

In Australian wealth protection, experience has been tracking in line with expectations, delivering another stable quarter for the business. Our second program of reinsurance agreements will take effect from 1 November 2017 adding further stability to earnings. The agreements will also release approximately A$500 million of capital to the group, subject to regulatory approval.

Commentary
Australian wealth management

  • Net cash outflows of A$243 million in Q3 17 compared to net cash outflows of A$327 million in Q3 16. As expected, the Q3 17 result reflects high levels of discretionary super contributions brought forward into Q2 17 ahead of 1 July 2017 changes to non-concessional caps.
  • AMP’s award-winning wrap platform, North, continued to perform strongly with Q3 17 net cashflows of A$1,282 million, increasing 13 per cent from A$1,136 million in Q3 16.
  • Total Australian wealth management AUM increased A$211m to $125.3 billion, reflecting positive investment returns.
  • AMP’s SMSF business SuperConcepts added approximately 1,475 funds across administration and software services during Q3 17. As at 30 September, it supported a total of 57,779 funds.
  • Wealth management ‘other revenue’ is on target to deliver 10 per cent growth from Advice and SMSF in FY 17.
  • Margin compression continues to track in line with guidance; it is expected to average around 5 per cent per annum to December 2017.

AMP Capital

  • AMP Capital external net cashflows were A$616 million in Q3 17, an increase from A$498 million in Q3 16, driven by flows into real estate and infrastructure investments, and strong performance by CLAMP.
  • AUM increased from A$178.9 billion at the end of Q2 17 to A$180.6 billion in Q3 17.
  • Strong performance in real assets with record commitments of US$4.1 billion secured for the infrastructure debt strategy, including reaching final close on Infrastructure Debt Fund III (US$2 billion target). Commitments will flow through to AMP Capital’s external net cashflows when investments are made.
  • AMP’s partnership with China Life continues to grow; AMP Capital’s share of CLAMP contributed net cashflows of A$682 million in Q3 17, taking net cashflows from the first three quarters of the year to more than A$1.4 billion.
  • International institutional client numbers grew 10 per cent to 277 during the quarter, supporting AMP’s strategy to grow its global footprint in investment management.

AMP Bank

  • Total loan book grew to A$19.2 billion at the end of Q3 17, an increase from A$18.8 billion in Q2 17.
  • Retail deposit book increased by A$329 million in Q3 17 relative to Q2 17.

Australian wealth protection

  • Stable quarter in wealth protection with experience tracking in line with expectations.
  • New reinsurance arrangements are due to take effect on 1 November 2017, further stabilising wealth protection earnings and releasing approximately A$500 million of capital from the AMP retail life insurance portfolio to the group, subject to regulatory approval.

New Zealand financial services

  • AMP New Zealand financial services’ net cashflows decreased to A$76 million in Q3 17, driven by elevated fund transfers in Q3 16 as a result of regulatory change (FMCA).
  • Net cashflows in KiwiSaver remain largely unchanged at A$107 million (A$108 million in Q3 16).

Australian mature

  • Australian mature net cash outflows in Q3 17 were A$356 million, compared to A$391 million in Q3 16, reflecting the run-off nature of the book.

Q3 17 cashflows

Australian wealth management

 

 

Cash inflows

Cash outflows

Net cashflows

Cashflows by product (A$m)

Q3 17

Q3 16

Q3 17

Q3 16

Q3 17

Q3 16

North1

4,314

3,649

(3,032)

(2,513)

1,282

1,136

AMP Flexible Super2

1,125

1,341

(1,416)

(1,424)

(291)

(83)

Summit, Generations and iAccess3

314

271

(810)

(697)

(496)

(426)

Flexible Lifetime Super (superannuation and pension)4

406

464

(830)

(882)

(424)

(418)

Other retail investment and platforms5

94

67

(82)

(80)

12

(13)

Total retail on AMP platforms

6,253

5,792

(6,170)

(5,596)

83

196

SignatureSuper and AMP Flexible Super - Employer

770

778

(651)

(659)

119

119

Other corporate superannuation6

349

370

(482)

(558)

(133)

(188)

Total corporate superannuation

1,119

1,148

(1,133)

(1,217)

(14)

(69)

Total retail and corporate superannuation on AMP platforms

7,372

6,940

(7,303)

(6,813)

69

127

External platforms7

378

301

(690)

(755)

(312)

(454)

Total Australian wealth management

7,750

7,241

(7,993)

(7,568)

(243)

(327)

 

Cash inflow composition (A$m)

Q3 17

Q3 16

Member contributions

884

742

Employer contributions

920

925

Total contributions

1,804

1,667

Transfers, rollovers in and other8

5,946

5,574

Total Australian wealth management

7,750

7,241


1 North is an award-winning fully functioning wrap platform which includes guaranteed and non-guaranteed options.

2 AMP Flexible Super is a flexible all in one superannuation and retirement account for individual retail business.

3 Summit and Generations are owned and developed platforms. iAccess is ipac’s badge on Summit.

4 Flexible Lifetime Super (superannuation and pension) was closed to new business from 1 July 2010. A small component of corporate superannuation schemes are included.

5 Other retail investment and platforms include Flexible Lifetime - Investments, AMP Personalised Portfolio and Synergy. The Synergy platform was closed in Q2 2016, with customer accounts transferred to North.

6 Other corporate superannuation comprises CustomSuper, SuperLeader and Business Super.

7 External platforms comprise Asgard, Macquarie, BT Wrap platforms and Challenger annuities.

8 Transfers, rollovers in and other includes the transfer of accumulated member balances into AMP from both internal (e.g. retail superannuation to allocated


 

AUM (A$m)

Q2 17

Q3 17 Net cashflows

Total

 

Q3 17

AUM

Superannuation

Pension

Investment

net

cashflows

Other

movements1

AUM

North

30,524

387

505

390

1,282

158

31,964

AMP Flexible Super

16,329

(55)

(236)

-

(291)

60

16,098

Summit, Generations and iAccess

11,716

(137)

(305)

(54)

(496)

57

11,277

Flexible Lifetime Super (superannuation and pension)

23,870

(281)

(143)

-

(424)

106

23,552

Other retail investment and platforms

2,480

-

-

12

12

(24)

2,468

Total retail on AMP platforms

84,919

(86)

(179)

348

83

357

85,359

SignatureSuper and AMP Flexible Super - Employer

17,522

127

(8)

-

119

67

17,708

Other corporate superannuation

12,769

(133)

-

-

(133)

60

12,696

Total corporate superannuation

30,291

(6)

(8)

-

(14)

127

30,404

Total retail and corporate superannuation on AMP platforms

115,210

(92)

(187)

348

69

484

115,763

External platforms

9,835

(103)

(128)

(81)

(312)

(30)

9,493

Total Australian wealth management

125,045

(195)

(315)

267

(243)

454

125,256

Australian wealth management - SuperConcepts2
Assets under administration

22,564

 

 

 

 

(98)

22,466

1 Other movements include fees, investment returns and taxes.

2 SuperConcepts assets under administration includes AMP SMSF, Multiport, Cavendish, SuperIQ, yourSMSF and Ascend administration platforms, but does not include Multiport Annual, BPO Connect and JustSuper.

 

  

AUM (A$m)

Q2 17

Q3 17

AUM

AUM

AUM by product

Superannuation

74,783

75,047

Pension

35,596

35,287

Investment

14,666

14,922

Total

125,045

125,256

AUM by asset class

Cash and fixed interest

31%

31%

Australian equities

31%

31%

International equities

26%

26%

Property

6%

6%

Other

6%

6%

Total

100%

100%


AUM summary (A$b)

Q2 17

Q3 17

AUM

AUM

Closing AUM

125.0

125.3

Average AUM

124.2

124.7


AMP Capital

 

AUM (A$m)

Q2 17

Q3 17 Net cashflows

Total

Other

Q3 17

AUM

Cash inflows

Cash outflows

net cashflows

movements1

AUM2

External

58,213

2,800

(2,184)

616

293

59,122

Internal

120,678

5,337

(5,822)

(485)

1,252

121,445

Total AMP Capital

178,891

8,137

(8,006)

131

1,545

180,567

 

AUM summary (A$b)

Q2 17

Q3 17

AUM

AUM

Closing AUM

178.9

180.6

Average AUM

178.8

179.6

 

1 Other movements include investment returns, distributions, taxes and foreign exchange movements.

2 AUM includes invested capital. Committed real asset capital is excluded from AUM.

 

AMP Bank

 

AMP Bank by product

Q2 17

 

Q3 17

Deposits and loans (A$m)

end balance

Other

movements1

end balance

Deposits (super and platform)2

5,169

(43)

5,126

Deposits (retail)2

6,479

329

6,808

Deposits (other)2

787

31

818

Loans

18,777

416

19,193

 

1 Represents movements in AMP Bank’s deposits and loan books.

2 At 30 Sep 2017, deposits include AMP Bank retail deposits (A$6.8b), AMP Supercash and Super TDs (A$2.0b), North and platform deposits (A$3.1b), internal deposits (A$0.6b) and other wholesale deposits (A$0.3b).

 

Australian wealth protection

 

Cashflows by product (A$m)

Cash inflows

Cash outflows

Net cashflows

Q3 17

Q3 16

Q3 17

Q3 16

Q3 17

Q3 16

Individual risk

373

364

(128)

(157)

245

207

Group risk

78

117

(100)

(86)

(22)

31

Total Australian wealth protection

451

481

(228)

(243)

223

238

 

Annual Premium In-force – API (A$m)

Q2 17

Q3 17

API

API

Individual lump sum

1,094

1,137

Individual income protection

396

404

Group Risk

440

376

Total

1,930

1,917

 

New Zealand financial services

 

Cashflows by product (A$m)

Cash inflows

Cash outflows

Net cashflows

Q3 17

Q3 16

Q3 17

Q3 16

Q3 17

Q3 16

KiwiSaver

215

217

(108)

(109)

107

108

Other1

237

263

(268)

(249)

(31)

14

Total New Zealand

452

480

(376)

(358)

76

122

 

AUM (A$m)

Q2 17

Q3 17 Net cashflows

Total

 

Q3 17

AUM

Superannuation

Pension

Investment

Other

net cashflows

Other

movements2

AUM

KiwiSaver

4,437

107

-

-

-

107

(68)

4,476

Other1

11,107

-

(1)

(29)

(1)

(31)

(219)

10,857

Total New Zealand

15,544

107

(1)

(29)

(1)

76

(287)

15,333

 

1 Other New Zealand financial services cashflows and AUM include New Zealand wealth protection, mature and non–KiwiSaver wealth management products.

2 Other movements include fees, investment returns, taxes, as well as foreign currency movements on New Zealand AUM.

 

New Zealand wealth protection

Q2 17

Q3 17

Risk Insurance Annual Premium In-force – API (A$m)

API

API

Individual lump sum

241

233

Individual income protection

44

43

Group Risk

38

40

Total

323

316

 

Australian mature

 

Cashflows by product (A$m)

Cash inflows

Cash outflows

Net cashflows

Q3 17

Q3 16

Q3 17

Q3 16

Q3 17

Q3 16

Australian mature

137

131

(493)

(522)

(356)

(391)

 

AUM (A$m)

Q2 17

Q3 17 Net cashflows

Total

 

Q3 17

AUM

Superannuation

Pension

Investment

Other

net cashflows

Other

movements1

AUM

Australian mature

21,080

(175)

(44)

(25)

(112)

(356)

(113)

20,611

 

1 Other movements include fees, investment returns, distributions, and taxes.