Powered by MOMENTUM MEDIA
investor daily logo

AMP flags $325m charges

  •  
  •  
3 minute read

The wealth giant has revealed it expects to take a hit ahead of its planned demerger next year.

On Friday, AMP said that following the upcoming demerger and a review of its balance sheet that it is preparing for additional impairment charges of $325 million in its FY 2021 results.

AMP said the charges are expected to come from partial impairment of deferred tax assets ($100 million post-tax), write-down of tangibles ($95 million post-tax), onerous lease contracts ($75 million post-tax) and other impairments and adjustments ($55 million post-tax).

“As we have developed our strategies for the post-demerger businesses of AMP and private markets, we have reviewed our balance sheet to ensure that assets recorded are in line with the future strategic direction,” AMP CEO Alexis George said.

==
==

“The charges are mainly non-cash and related to legacy issues, and our action will ensure that both businesses are in a stronger position to take advantage of opportunities in the future.”

The news comes just over a week after AMP confirmed it had entered into an enforceable undertaking with the Australian Prudential Regulation Authority (APRA) regarding “a number of historical matters in its superannuation business”.

It’s understood that the remediation costs will be between $40-45 million.

“APRA’s decision to accept the CEU follows a lengthy investigation into past conduct that APRA believes led to a number of potential breaches by AMP Super of the Superannuation Industry (Supervision) Act 1993,” the regulator said in a statement.

“Some of these matters were referred to APRA by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019, and others were self-reported by AMP Super between late 2019 and 2020.”

Earlier this month, AMP also completed its exit from its former life insurance and mature business, AMP Life, as it gears up for the 2022 demerger.

Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily. 

Neil is also the host of the ifa show podcast.