AMP Ltd’s $56.4 billion superannuation and investments division is in “a better position” than chief executive officer Alexis George expected it to be, after stemming outflows and lifting underlying net profit after tax by 26.4 per cent to $67 million for the 12 months to 31 December 2024.
On Friday, AMP unveiled a group underlying net profit after tax of $236 million for the year, up 15 per cent from 2023. It reported a 43.3 per cent drop in statutory net profit after tax, after its 2023 results were inflated by profits on the sales of AMP Capital and Super Concepts, and its 2024 result was impacted by the sale of its financial advice licensees to Entireti for a loss.
AMP chief executive Alexis George said the company’s superannuation division “was in a better position than where I expected it to be at the half, and it’s clearly in a better position than where I expected it to be at the full year as well”.
“In terms of the results, from a profitability perspective, they’re up 25-plus per cent, so that’s really encouraging. But I think better than that, for me, is the flows are really starting to improve.”
Net cash outflows excluding pension payments totalled $1 billion for the year, a significant improvement from the outflow of $6.4 billion the year before, which reflected the loss of a significant mandate.
AMP said margins in its superannuation and investments arm declined slightly, from 64 basis points to 63; and lower investment management expenses helped controllable costs fall by 2.3 per cent and variable costs by 9.2 per cent.
George said the superannuation and investment division’s inflow trends quarter on quarter are “starting to be positive”.
“That’s a result of a few things, really – things we’ve just been working on hard, like customer service,” she said.
“Performance this year was really good, top-quartile; service has already been good; and our reputation and our brand has really started to improve.”
George said retention of existing customers has been key to the improved performance.
“We’ve really started to focus on retention as we improve performance,” she said.
“When you look in that business, given what we’ve been doing, it’s focusing on retention and improving the customers we’ve had. We’re bringing in some new business, but it’s much more about that retention.”
George said she believes AMP has now “proven that we can deliver the key features you need to compete there”.
“And so that’s the price, performance, service, reputation,” she said.
“We’re reorienting not just in our super business, but in our platforms business as well, though it’s been delivering growth now for over a year. Our whole company is talking [about] how do we reorient to growth, as opposed talking about simplification and asset sales. So that is our mantra through ’25: reorientation towards growth.”
Despite similarities in strategy in having largely sold off their advice businesses, George said AMP is quite different from its retail super and master trust competitor Insignia, which is currently the subject of competing bids from three separate private equity investors.
Where the same private equity investment interest is in AMP is “a question we get asked,” George said.
“I think the reality is clearly Insignia is in play and that’s public information, we’re in a really different space to Insignia in a couple of ways,” she said.
“Firstly, our portfolio is different. Yes, we both have MySuper or master trusts; we both have platforms; and we both have some advice capability; but we also have a bank, and we also have some offshore partnerships in our portfolio. Very different to what Insignia has. So that’s one thing.”
“And the second thing is we’re far further down the simplification agenda than them. I know they’ve done some work, but they’ve got a lot of work to do in terms of bringing those businesses together still. We’ve done a lot of that work over the last three to four years, so I think we’re in quite different positions.”
