Slide 1: 2023 Half Year Results
1H 23 2023 Half Year Results Alexis George – CEO Blair Vernon – CFO Thursday 10 August 2023 1
Slide 2: Agenda
Agenda 1. 1H 23 overview 2. Financial results and business unit performance 3. Costs 4. Capital 5. Summary 6. Q&A 2
Slide 3: 1H 23 overview
1H 23 overview Alexis George, CEO 3
Slide 4: Overview
Overview • Group NPAT (underlying) in line with 1H 22 to $112m 1 • $610m in capital returned 2 since 11 August 2022. • $70m to be returned via FY 23 interim dividend of 2.5 cents per share, 20% franked • Remaining $70m to be returned through current buyback, expected by end October • $302m of corpor
Slide 5: Market conditions
Market conditions Challenging economic conditions amid more supportive regulatory environment Context AMP’s response • 4% increase in cash rate over 12 interest rate • Prudent loan book management with dynamic LVR at Inflation and rises, driven by higher goods and services 53% prices, causing cost o
Slide 6: 1H 23 progress on strategy
1H 23 progress on strategy FY 23 – 25 strategic priorities 1H 23 • Invest to grow AMP Bank • Lending growth 1.1x system in a competitive environment • Grow the North platform • Platforms Net cashflows (excluding pension payments) reduced Reposition • New Zealand – continued revenue diversification t
Slide 7: Revitalised focus on customer, culture and community
Revitalised focus on customer, culture and community Customers People & Partners Communities & Environment • A$1.04b retirement • 71 employee satisfaction • 86+ ESG focused payments score investment options on North • Provided 4,295 customers • Updated 2023 performance with new home loans in scoreca
Slide 8: 1H 23 financial results
1H 23 financial results Blair Vernon, CFO 8
Slide 9: 1H 23 group overview
1H 23 group overview NPAT (underlying) of $112m in line with 1H 22 $m 1H 23 1H 22 2H 22 FY 22 % 1H 23/ Revenue: 1H 22 AUM based revenue 374 410 384 794 (8.8) • AUM revenue softer following further product simplification Net interest income (NII) 200 176 206 382 13.6 • Increased NII reflecting 8.3% m
Slide 10: 1H operating business unit overview
1H 23 operating business unit overview Clear focus on performance across every operating business unit % 1H NPAT (underlying) 23/ Cost to $m 1H 23 1H 22 2H 22 FY 22 1H 22 income AMP Bank 57 46 57 103 23.9 43.9% • Focus of investment spend to drive ongoing growth in AMP Bank and Platforms Grow Platfo
Slide 11: Items below NPAT overview
Items below NPAT overview Items below NPAT (underlying) remain significant in 1H 23 $m 1H 23 1H 22 2H 22 FY 22 % 1H 23/ Key movements 1H 22 • Litigation and remediation related costs predominantly NPAT (underlying) 112 112 72 184 - relate to $50m provision (pre-tax), which considers the present pote
Slide 12: NPAT (underlying) movement by driver
NPAT (underlying) movement by driver Improved loan growth offset by sponsor valuation movement 17 11 (16) (8) 4 (8) 112 112 1H 22 NPAT Sponsor valuation Master Trust Market volatility Net investment North Guarantee Bank revenue 1H 23 NPAT (underlying) movement simplification and other income/int. mo
Slide 13: Total AUM – drivers of revenue
Total AUM – drivers of revenue 1H 23 closing total AUM grew 3.5% to $134.5b while margins remain in line with guidance Platforms • Closing AUM grew 4.3% to $68.3b driven Closing AUM 2H 22 65.5 54.0 10.5 $130.0b by market movements (2H 22 $65.5b) • 47bps AUM based revenue to Average AUM is flat (2H 2
Slide 14: Operating business units
Operating business units 14
Slide 15: AMP Bank
AMP Bank Disciplined growth in a challenging market Key performance measures 1H 23 1H 22 2H 22 FY 22 % 1H 23/ 1H 23 overview 1H 22 • Underlying NPAT up 23.9% Net interest income ($m) 200 176 206 382 13.6 • 8.3% residential mortgage book growth, 1.1x system Fee and other income ($m) 1 9 8 7 15 12.5 •
Slide 16: AMP Bank: strong credit quality, focused on returns
AMP Bank 3.10% Strong credit quality, focused on returns 2.60% Common Equity Tier 1 (%) AMP Bank’s 30+ and 90+ days mortgage arrears 2.10% AMP 30+ days AMP 90+ days 15 Regional peers avg.1 11.8 10.7 10.4 10.5 10.4 1.60% 10 1.31% 1.10% 5 0.60% 0.55% 0 0.10% FY 19 FY 20 FY 21 FY 22 1H 23 Jun-21 Sep-21
Slide 17: Platforms
Platforms NPAT (underlying) up 25.7% and continuing to drive IFA expansion % 1H 23/ 1H 23 overview Key performance measures 1H 23 1H 22 2H 22 FY 22 1H 22 • NPAT up 25.7% includes positive North Guarantee AUM based revenue ($m) 1 158 165 154 319 (4.2) movement Other revenue & investment income • Net
Slide 18: Platforms
Platforms Resilient cashflows underpinned by our weighting to super and pension Net cashflows: Super v Investment ($m) Assets Under Management ($m) 1,341 1,298 1,214 1,288 1,244 1,178 Super net cashflows 940 931 13,904 20% 741 Superannuation 634 Investment net cashflows 26,072 38% Pension Net cashfl
Slide 19: New Zealand Wealth Management
New Zealand Wealth Management Continued diversification of revenue streams Key performance measures 1H 23 1H 22 2H 22 FY 22 % 1H 23/ 1H 23 overview 1H 22 • KiwiSaver net cashflow improved to $74m (on 1H 22) AUM based revenue ($m) 44 47 45 92 (6.4) reflecting new member growth Other Revenue ($m) 20 1
Slide 20: Master Trust
Master Trust Continued focus on simplification and cost efficiency % 1H 23/ 1H 23 overview Key performance measures 1H 23 1H 22 2H 22 FY 22 1H 22 • NPAT improved 7.7% to $28m, with margins impacted AUM based revenue ($m) 1 172 198 185 383 (13.1) as we simplified the investment menu offset by reduced
Slide 21: Advice
Advice Losses improving as we continue to drive cost efficiencies Key performance measures 1H 23 1H 22 2H 22 FY 22 % 1H 23/ 1H 23 overview 1H 22 • NPAT loss of $25m improved 16.7% on 1H 22 reflecting Advice revenue ($m) 25 30 26 56 (16.7) continued cost focus Variable costs ($m)1 (1) (9) (9) (18) 88
Slide 22: Group
Group Continued focus on reducing group costs $m 1H 23 1H 22 2H 22 FY 22 % 1H 23/ 1H 23 overview 1H 22 • Strategic partnerships impacted by sponsor valuation Strategic partnerships1 35 55 34 89 (36.4) movements this half – down $20m pre-tax, $16m post- tax Controllable costs (50) (44) (52) (96) (13.
Slide 23: Costs
Costs 23
Slide 24: FY 23 controllable costs
FY 23 controllable costs Targeting controllable costs of $380m - $390m in 2H 23 with FY 23 guidance of $745 - $755m (FY 22: $757m) 1H 22 $360m FY 22: $757m (Rebased from $791m 2H 22 following SuperConcepts $397m sale) 1H 23 $362m FY 23: ~$745m-$755m 2H 23 ~$380m-$390m 0 50 100 150 200 250 300 350 40
Slide 25: FY 24 and FY 25 targets
FY 24 and FY 25 targets Targeting controllable cost savings of $120m by FY 25 through continued investment in business simplification • Targeting $120m reduction in cost base by end of Investment expected FY 25 • One-off spend of $120-150m over FY 24 and FY 25 to achieve the cost-out • Expected FY 2
Slide 26: Capital
Capital 26
Slide 27: Capital position
Capital position Overall target capital level reduced following AMP Capital divestments ($m) 2,964 Target capital level 1,976 515 Board buffer Decreased by $184m from FY 22 • Board buffer decreased following sale of AMP Capital assets Increased by $95m from FY 22 1,461 • AMP Bank $1,125m Minimum reg
Slide 28: Capital position
Capital position 1H 23 pro forma surplus capital of $848m ($m) 2,964 Items reported NPAT below NPAT 988 (underlying) and Share Surplus capital discontinued buybacks Adjustments 1H 23 Remaining operations FY 22 Net to board interim share Final business target dividend buybacks dividend activity1 $261
Slide 29: Capital position
Capital position Capital and balance sheet review supports our prudent approach to returning capital until greater certainty is known % 1H 23 Outcome of capital and balance sheet review $m 1H 23 1H 22 FY 22 / 1H 22 AMP concluded the capital and balance sheet review in June and determined to: Total c
Slide 30: FY 23 guidance
FY 23 guidance 30
Slide 31: FY 23 guidance
FY 23 guidance Outlook for key financial items FY 23 guidance • Targeting above system residential loan growth in FY 23 AMP Bank • FY 23 NIM in range of 1.30-1.35% • FY 23 AUM based revenue margins expected to be broadly in line with FY 22 at ~48bps Platforms • Net cashflows (excluding pension payme
Slide 32: Summary
Summary Alexis George, CEO 32
Slide 33: 2H 23 focus
2H 23 focus • Disciplined Bank growth in 2H, while managing NIM • Focused on further growth through Managed Portfolios offerings and IFA engagement through Reposition innovative Lifetime Income Account • Progressing further reductions in Advice costs • Achieve cost base target of $745-755m by FY 23,
Slide 34: Summary
Summary Operating businesses delivering, addressing legacy issues with a focus on the future • Sale of AMP Capital and SuperConcepts Making progress against our • $610m of capital returned since August 2022 commitments • Commenced implementing outcomes of capital and balance sheet review • Prudent a
Slide 35: Appendix
Appendix 35
Slide 36: AMP Bank
AMP Bank A well-capitalised bank delivering in a challenging market environment FY 23 - Large proportion of AMP Bank’s mortgage book ahead on AMP Bank has focused on growing its deposit as a source of funding, which repayments (%) has ensured sufficient funding available to fund loan growth (%) RMBS
Slide 37: Key performance indicators: AMP Bank
Key performance indicators AMP Bank Key performance measures 1H 23 1H 22 2H 22 FY 22 % 1H 23/ 1H 22 Return on capital 9.8% 8.5% 10.1% 9.3% n/a 1 Bank total capital resources ($m) 1,186 1,087 1,159 1,159 9.1 Risk weighted assets ($m) 9,778 9,065 9,604 9,604 7.9 Capital Adequacy Ratio 17.7% 15.9% 17.8
Slide 38: Key performance indicators: Platforms
Key performance indicators Platforms % 1H 23/ Key performance measures 1H 23 1H 22 2H 22 FY 22 1H 22 AUM ($m) 68,322 63,943 65,495 65,495 6.8 Net cashflows excluding pension payments) ($m) 741 1,288 1,244 2,532 (42.5) Other movements ($m) 1 2,086 (8,446) 308 (8,138) n/a Average AUM ($m) 2 67,315 67,
Slide 39: Key performance indicators: Master Trust
Key performance indicators Master Trust % 1H 23/ Key performance measures 1H 23 1H 22 2H 22 FY 22 1H 22 AUM ($m) 55,427 55,244 54,023 54,023 0.3 Net cashflows (excluding pension payments) ($m) (993) (1,439) (2,093) (3,532) 31.0 Other movements ($m)1 2,397 (6,253) 872 (5,381) n/a Average AUM ($m)2 55
Slide 40: Key performance indicators: New Zealand Wealth Management
Key performance indicators New Zealand Wealth Management % 1H 23/ Key performance measures 1H 23 1H 22 2H 22 FY 22 1H 22 AUM (A$m) 10,789 10,205 10,459 10,459 5.7 Net cashflows (A$m) (67) (127) 1 (126) 47.2 Market and other movements (A$m) 397 (1,842) 253 (1,589) n/a Average AUM ($m)1 10,676 11,153
Slide 41: Important information
Important information This presentation has been prepared by AMP Limited (ABN 49 079 354 519) (“AMP") and is general background information about AMP and its activities current at the date of this presentation, which may be subject to change. It is information in summary form and does not purport to
Slide 42: AMP-=
AMP-=