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July 25, 2018

Ameriprise Financial wealth unit earnings soar 20% in Q2

The advice and wealth management arm of Ameriprise Financial has posted pre-tax adjusted operating earnings of $350m for the second quarter of 2018, a surge of 20% compared to $291m a year ago.

The company attributed the rise in earnings to asset growth and higher earnings on cash balances.

The division’s pretax adjusted operating margin increased to 22.7% in the second quarter from 21.1% in the year ago period.

The unit’s net revenues increased 12% to $1.54bn from $1.37bn a year earlier. Compared to last year, adjusted operating expenses increased 10% to $1.2bn, mainly due to higher distribution expenses related to growth in client assets.

Total retail client assets rose 10% year-on-year to $566bn. The company said that the rise was driven by client net inflows, client acquisition and market appreciation.

Wrap net inflows were $5.3bn, a jump of 18% from $4.5bn in the previous year.

Asset Management

Pre-tax adjusted operating earnings in the asset management unit were $183m for the second quarter of 2018, up 4% from $176m in the corresponding quarter of 2017.

The unit’s adjusted operating net revenue rose 1% year-on-year to $755m. The company attributed the rise to asset growth from market appreciation and the Lionstone acquisition.

The division’s adjusted operating expenses remained almost stable at $572m.

The unit’s AUM totalled $482bn at the end of June 2018, up 2% from $473bn last year.

Ameriprise chairman and CEO Jim Cracchiolo said: “Ameriprise had a strong second quarter and a record first half of the year for financial results. In the quarter, we grew earnings per share by 29 percent and delivered a return on equity of 31.1 percent. We continue to generate strong free cash flow that we invest in the business and return to shareholders at a high level.”

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