AMP Limited expects to pay a dividend of 16 cents per share for the half year to 31 December 2008.
The company revealed its intentions ahead of the publication of its full-year results because the average market expectation of 19 cents was too high.
The decision for a more conservative dividend payout was made to maintain balance sheet strength in the current volatile markets and to be able to fund organic growth initiatives, AMP chief executive officer Craig Dunn said on Friday.
"We know this won't be necessarily a popular decision in the short term with some shareholders, and we have not taken the decision lightly but it is the right one for the company and our shareholders in the long term," Dunn said.
He said the decision should not be seen as a sign of trouble at the company. "I wouldn't read too much into the decision we've made today," he said.
The company, whose financial year corresponds with a calendar year, will pay a total dividend of 38 cents per share over 2008.
In the first half of 2008, AMP also paid out 2 cents a share from the proceeds of the sale of Cobalt/Gordian.
The company expects to report an underlying profit of $800 million for the full year, which is a 9.3 per cent decline from an $882 million profit in 2007.
Cashflows in AMP Financial Services fell in the fourth quarter of 2008 to $252 million from $524 million in the same period in 2007.
The fall reflected lower discretionary superannuation contributions in the wake of volatile investment markets and subdued investor sentiment, the company said.
AMP will report its full year audited financial results on 19 February 2009.
