AMP slides as profits slashed in wake of scandal

by Chris Becker

Couldn’t have happened to a nicer ticket puncher with a huge slash to profits in the wake of the Royal Commission. From ABC:

In a statement to the ASX, AMP further downgraded its already weak profit guidance, reporting that its net profit for the 2018 calendar year would be “approximately $30 million” — 96 per cent lower than the $841 million profit reaped the previous year.

 Beaten up shareholders will see their final dividend crumble to 4 cents per share from 14.5 cents, while the company’s share price has more than halved since the banking royal commission started early last year.

AMP is getting hit hard on the ASX today, with the broader market accelerating early gains to be up 0.7% or so, AMP has lost nearly 7% so far.

It’s been a horror year for shareholders:

The question is can AMP turn it around, with almost all its head cut off, can a new crew come in and displace the culture of avarice and greed?

Only the bottom pickers will want any of this action, with even more headwinds for the financial services industry coming in 2019.

Comments

  1. So, what other ASX listed companies are in the same boat as AMP but are yet to be shown for what they really are?

  2. Someone yesterday on MB made what I thought was a very good point: when Kenneth Hayne hands his report to the GG on 1 February will the likes of AMP have to go into a trading halt / be suspended from trading on the ASX?

    Once the final report is handed to the government would anyone seriously believe that will be no leaks on any of Hayne’s findings. And any rumours of what those findings are, whether based in truth or in fiction, clearly will be price sensitive. Given the billions of dollars at stake belonging to hundreds of thousands of investors surely stocks such as AMP, IFL, NBA and CBA will have to be suspended from trading until the market is fully informed of those findings.

    As much as the government may be tempted to sit on the Hayne report until after the election I suspect they will need to release it very promptly or risk totally stuffing up trading on the ASX.

    • It will also be interesting to see the ratings agencies response to it. Will they go down the line of, “The dirt has been exposed and reform is underway. Too big to fail; couldn’t be stronger!” or embrace the downside risk and reduce their ratings?

      My guess is they do very little, say very little and hope things work out OK in the end.

  3. I wish there was a Schadenfreude ETF, something like SHF if not taken. This ETF shorts companies purely for maximum schadenfreude. Maybe a mix of shorted stocks like.

    McGrath
    Genworth
    AMP
    etc.

  4. Hard to believe that AMP Capital and AMP Bank between them aren’t worth a big chunk of that $7 billion.

    • Jason. My gut feel is that AMP Capital and AMP Bank are worth more than the current market cap of the parent, ie: the rest of the group has a negative net worth.

      • But if you spin off the others, the rest can’t be worth less than 0 to shareholders.

        That said, APRA might have some concerns!

      • Dear Sheep ( Buenos Tardes ) and Jason

        With MB so negative on AMP it must be a raging buy going by MB’s past performance.

        With former CEO of CBA Mr Murray now at the helm of AMP what could possibly go wrong ?

  5. But don’t they have Shane …. what’s his name guiding them through the economic minefield? Oh yeah, if he had any value in the sector he’d have jumped ship already

  6. gosh and everyone’s panicked about a 10% annual property drop…..this is why property kills shares every time from a risk return (and sleep at night) perspective…….LOL

  7. Perhaps they should not waste billions on a swanky new building.
    Like putting silk sails on a sinking ship full of holes.
    No one cares about turning AMP around and improving it. Nobody

  8. I have some AMP shares, and a few minutes ago a steaming turd dropped into my email inbox from them that attempts to explain that things ain’t so great at the moment and don’t expect anything special from them anytime soon.

    I should’ve dumped them years ago. Oh well.

  9. And I’m hearing they ate reneging on their BOLR … they sold advisers clients and then tell the adviser that the clients aren’t worth anything …. ha ha