AMP shares: where next as ‘AMP Australia’ restructure announced

AMP is poised to combine its bank and wealth operations in a ‘large-scale’ but ultimately unsurprising restructuring move.

AMP share price in focus Source: Bloomberg

Simplicity was always the answer, apparently. That is, to simplify, strengthen and scale the AMP business model. A future-proofing, forward-thinking tour de force.

Specifically, AMP (ASX: AMP) is now set to combine its Bank and Australian Wealth operations under a single ‘AMP Australia’ umbrella.

Indeed, as we previously reported, in the scheme of things AMP:

‘Will look to significantly decrease its reliance on its wealth management arm; while aiming to increase the profitability of both AMP Bank and AMP Capital.’

So today’s restructuring news is really not much of a surprise.

Details of the restructure

Sally Bruce, who previously led AMP Bank, will step down from her role. In her place, Alex Wade, who joined AMP just 10 months ago – starting in the role of chief executive of AMP's Wealth Management arm – will head the newly minted ‘AMP Australia’.

Speaking of this announcement, AMP’s CEO, Francesco De Ferrari commented that the aim here was to bring:

‘Together our bank and wealth management teams in Australia will drive a more integrated organisation better able to pursue the significant opportunity we see in providing more holistic wealth services for our clients.’

Mr De Ferrari added that:

‘Closer integration of the businesses was part of our long-term plan, and with Sally's decision to step down we have been able to accelerate our internal re-organisation.’

CHOICE and the AMP share price

The bumpy road for AMP’s share price has continued today, after the stock fell 0.62% to hit A$1.59 per share, by the late afternoon.

Six months ago the AMP share price traded at the A$2.21 mark; one year ago at the A$3.05 mark. For reference, at its peak, AMP would have set you back around A$10 per share.

Beyond share price gyrations and according to Bloomberg Data, analysts don’t seem fully convinced of AMP’s simplified strategy: just 15.4% of analysts rate AMP a buy, 53.8% a hold and the remaining 30.8% see the troubled company as a sell.

The highest price target comes from Everblu Capital, which has a buy recommendation and a lofty price target of A$2.48 on the stock.

Bell Potter’s outlook is significantly more dour, rating the stock a sell. A price target of A$1.32 says all that needs to be said on their outlook.

Maybe worse still was today’s announcement from CHOICE, that:

‘This year’s Shonky goes to AMP for its grossly underperforming superannuation division, which has the lowest customer satisfaction ratings on record and boasted no fewer than a million-plus inactive accounts across its AMP Retirement Trust and Super Savings Trust products in 2018.’

Watch this space.


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