AMP share price: 2019 full-year results unpacked

We examine some of the key things we learnt from AMP's FY19 full-year results.

At first creating disappointment and then maybe relief – AMP Limited (ASX: AMP) today revealed its full-year, 2019 results to the market.

The front-line figure was a $2.5 billion net loss – due primarily to a $2.35 billion write-down recorded in the first-half.

This impairment charge was mainly non-cash in nature.

In this sense, much of today’s damage was already known to investors prior to the full-year release. Even so, the AMP share price was still bid as much as 3.84% lower by the afternoon session – to $1.76 per share.

In saying that, the share price did rebound somewhat before the market close: rallying ~3.5% from a late-day low, to finish out the session just in the red.

And in a surprising move, that one doubts few could have predicted, Bell Potter today upgraded their rating on AMP to Buy from Sell and lifted their price target on the stock to $2.25 per share.

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Centrally, illustrating the lasting impact of the Hayne Royal Commission, AMP today revealed a full-year underlying profit of $464 million, a far cry from the $680 million the company registered just a year prior.

This, said management was reflective of the difficult environment for the Australian Wealth Management industry; though it was also pointed out that these difficulties were at least partially offset by the strong performance of AMP Capital and the consistency of AMP Bank.

In light of that and commenting on today’s release, AMP’s Chief Executive – Francesco De Ferrari said:

'2019 was a year of fundamental reset at AMP. We rebased our business, set out a new group strategy and strengthened our capital base to accelerate the execution of our strategy.'

He continued by stating that:

'In a period of unprecedented legislative and regulatory pressure we have established a strong three-year roadmap for recovery. Our focus in now on delivery.'

AMP share price: other figures in focus

A bright spot for the company, AMP Capital reported FY19 operating earnings of $198 million, representing a 18.6% increase over FY18 earnings. This performance success was attributed to 'growth momentum in infrastructure and real estate [as well as] continued global expansion.'

AMP capital currently has $203 billion in assets under management (AUM).

Moreover, AMP Bank also posted stable results today, bringing in $141 million in operating earnings during the year, compared to $148 million, in FY18.

In the current low growth environment, AMP Bank also registered impressive loan growth, with the bank's mortgage book growing 3.8% – to $20.2 billion in FY19.

Disappointingly for yield-hungry investors, AMP today announced that it would not issue a Final Dividend.

Client remediation: on track

Finally, the firm noted that its client remediation program was tracking to plan – expected to be approximately 80% complete by the end of the 2020 fiscal year.

In the second half of 2019, AMP recorded $190 million in remediation costs.

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