AMP buoyant on AXA merger
AMP chief executive Craig Dunn insists the growing financial stresses in Europe over the past year have not diminished the appeal of last year's $14.6 billion joint move on rival AXA Asia Pacific.
AMP chief executive Craig Dunn insists the growing financial stresses in Europe over the past year have not diminished the appeal of last year's $14.6 billion joint move on rival AXA Asia Pacific.Nine months into the merger, Mr Dunn said the justification for the deal was stronger than ever."Getting an opportunity to merge with AXA that doesn't come along very often," Mr Dunn told The Age.The structure of the transaction using AMP shares to fund the deal protected shareholders from falling markets. Under the deal, AMP sold AXA's Asian businesses to France's AXA SA.Mr Dunn said bringing the two Australian wealth managers together would create a more efficient business, while revenue growth would come over time, regardless of uncertain markets."You are starting to see value in the short term, but you will also see value longer term, and strategically this business is very different and much stronger than it ever was because of the merger," Mr Dunn said.He was speaking as AMP posted a net profit of $668 million for the year to December 31. This was down 11 per cent on the previous corresponding period, mostly due to a lower valuation of the company's investment holdings.However, underlying profit AMP's preferred measure of profitability because it smooths out market volatility rose 19.6 per cent to $909 million.The underlying result included contributions from the AXA business. Mr Dunn said AXA filled the gaps in AMP's product range. For example, AXA was stronger on platforms that financial advisers use to manage client money, while AMP was a big player in superannuation.AMP is still aiming to save $140 million as a result of the merger, with savings coming faster than expected.AMP's final dividend of 14?, down 1? on last year, will be paid on April 5.Mr Dunn said AMP planned to lower its dividend payout ratio to between 70 and 80 per cent of profits, instead of its present target of 75 and 85 per cent, to top up capital amid tougher regulatory requirements for wealth managers.