Australian wealth manager AMP has posted a net profit of A$115m ($85.2m) for the first half of 2018, a slump of 74% compared to A$445m ($33m) in the previous year.
The performance was dragged down by provisions to compensate customers for charging fees for no service. The firm came under the scanner of the banking royal commission for the scandal, which prompted a series of senior level exits at the company.
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The firm’s underlying profit, excluding provisions, dipped 7% to A$495m from A$533m last year.
Among the firm’s various business divisions, Australian wealth management, AMP Capital, and AMP Bank reported rise in earnings. Operating earnings in the Australian wealth management unit increased 6% to A$204m from A$193m last year.
Compared to the previous year, operating earnings in AMP Capital rose 2% to A$94m while that of AMP Bank surged 20% to A$78m.
However, New Zealand financial services and Australian mature units reported 14% and 7% fall in operating earnings, respectively. Earnings also decreased at the Australian wealth protection division.
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By GlobalDataAMP acting CEO Mike Wilkins said: “Our first half results have demonstrated AMP’s resilience through a difficult period. While there will be further challenges ahead, we have a strong foundation on which to reset the business and restore the confidence of our customers and the wider community.
“AMP Bank and AMP Capital have continued to grow and our Australian wealth management business has again shown its ability to respond to changing market circumstances, broadening its revenue base and managing its controllable costs. The events around the Royal Commission into financial services have challenged our reputation, and while we continue to monitor the impacts, we have taken action to stabilise the business and move forward.”
