AMP looks to growth in Asia after AXA purchase
THE chief executive of AMP, Craig Dunn, has declared the wealth manager is better placed than ever to tackle the structural challenges facing the retirement savings industry, with integration efforts from last year's $4 billion buyout of AXA Asia-Pacific almost completed.
THE chief executive of AMP, Craig Dunn, has declared the wealth manager is better placed than ever to tackle the structural challenges facing the retirement savings industry, with integration efforts from last year's $4 billion buyout of AXA Asia-Pacific almost completed.Mr Dunn also suggested he was eyeing further expansion into Asian markets after gaining ground from existing investments in China and Japan. However, any further move would be on a long-term basis."Your approach to each [Asian] market has to be different and you have to be very patient. You can waste a lot of money if you move too quickly," he said yesterday.Mr Dunn was speaking as AMP delivered a 7 per cent rise in underlying profit to $491 million. The result for the six months to the end of June came in slightly better than expected and was helped by tight cost control.Shares in AMP rose more than 4 per cent to a five-month closing high of $4.36 as the result eased investor concerns about Australia's biggest superannuation manager, ranging from capital to falling demand for wealth products.Since the financial crisis, superannuation managers have been grappling with households turning their back on stockmarkets and putting more savings into lower-risk areas such as bank deposits and bonds.The combination of the AXA businesses was a major contributor to the lift in profit, delivering higher fee income and greater cost savings."There is no doubt in my mind that the merger means the new AMP, or [that the] combined business, is much more competitive and much stronger, can grow more quickly and deliver real value to shareholders," Mr Dunn said.But with surplus capital, and the integration of AXA running six months ahead of schedule, the wealth manager was now looking to tap faster-growing areas of the retirement savings industry such as self-managed superannuation."Clearly the [financial crisis] has had a very significant impact on markets. I think the biggest change is on how consumers are changing their preferences - they're more cautious than they once were, they're looking for greater value and they're more selective," he said.Despite the rise in profits, AMP opted to cut its first-half dividend by 1.5? to 12.5? a share.A Deutsche Bank analyst, Kieren Chidgey, said AMP had delivered a solid profit result, helped by improved wealth management fund flows and margin trends.AT A GLANCE2012 2011Revenue $7.03b $3.92bProfit $383m $346mEPS 13.5? 14.4?Dividend 12.5? 14?