AMP has slumped to a full-year net loss of $2.5 billion and will not pay a final dividend as impairments and a sagging wealth management division impede its reputational rebuild.
The company’s hefty net loss for the full-year ending December 31 follows a gain of just $28 million in the prior period, with the latest full-year report weighed down a $2.4 billion first-half impairment on its AMP Life business.
AMP shareholders will not receive a final dividend this year, though chief executive Francesco De Ferrari has been granted a 66 per cent boost to his potential short term bonus.
The firm said on Thursday the reputational impacts at its Australian wealth management arm had continued, with earnings from the division halving to $182 million for the year, as net cash outflows rose to $6.3 billion, including $2.4 billion for pension payments.
Net cash outflows last year were $3.968 billion.
AMP’s underlying profit slumped by 32 per cent to $464 million during the year, with AMP Bank profit dropping 4.7 per cent to $141 million.
Shares in the company were 4.11 per cent lower at $1.75 by 1345 AEDT, having earlier dipped by as much as 4.2 per cent.
The company announced in August it was offloading its life insurance business and embarking on a $1.3 billion turnaround strategy to repair its reputational mauling at the royal commission.
It completed a $650 million capital raising that same month in order to help fund the three-year transitional program.
Mr De Ferrari said he was not happy with the number of customers leaving the wealth management arm.
“The royal commission obviously had a reputational impact on AMP and is disrupting the whole industry,” he said.
The commission, which delivered a final report last year, found widespread wrongdoing across the industry.
AMP staff were found to have given inappropriate advice and charged clients for advice they never received.
AMP is still repaying customers for its mistakes.
It paid $190 million to customers in the second half of 2019, bringing the total refunded to $264 million overall.
Management said the business was going through significant change and will review dividends after the sale of the life insurance business.
AMP also blamed increasing regulatory and compliance costs for the lower full-year result and says significant legislative and regulatory change are expected.
Mr De Ferrari, however, stands to earn more for his work.
As flagged in a separate release to the ASX, the chief executive’s maximum potential short-term bonus has been increased to 200 per cent of his fixed base salary, up from a previous maximum of 120 per cent.
Mr De Ferrari’s annual base salary was set at $2.2 million when he was appointed in 2018.
More than two-thirds has been wiped from AMP’s share price since March 2018.