The company, which has offices in London, Hong Kong and Beijing as well as across Australia and New Zealand, said it had recorded a $344m (£210m, $262.6m ) net loss in its 2016 fiscal year following a full year net profit of $972m in 2015.
AMP said the results were hit by a A$668 million charge for goodwill impairment in its Australian Wealth Protection business, which includes life insurance, income protection, financial advice and superannuation services for individuals and companies.
Loss expected
AMP had warned the market to expect the loss last year stating the charge was due “uncertainty in superannuation legislation leading to lower consumer confidence in the system, advisers adjusting to the enhanced regulatory environment and recent investment market volatility.”
The underlying full year result for the wealth protection division saw operating earnings down 2% to A$401m.
Action taken
AMP chief executive Craig Meller said on Thursday: “The wealth protection market deteriorated in 2016 and we took action to re-set and stabilise our business.”
As part of the changes being made to the troubled division, the company announced on Thursday that it had deliberately cut financial adviser numbers in 2016 by tightening the classification of authorised representatives.
“A higher-than-usual number of advisers also decided to retire or leave the industry in the face of challenging industry conditions and increasing education and professional requirements,” it said.
AMP had more than 4,000 aligned and employed financial advisers at the start of 2016 managing more than A$215bn in assets for its customers. As a result of the changes it has made during the year the number of advisers has been cut by 14% to 3,519 advisers.
Expansion seen
Despite the poor performance of its core division, the latest results show AMP’s underlying business and balance sheet remained strong and well capitalised.
It said it held more than A$2.3bn of capital above the minimum regulatory requirements. The company also announced a share buy-back of up to A$500m, to be conducted during 2017, and declared a final dividend of 14 cents a share, making its full year 2016 dividend payout ratio 85% of underlying profit.
The company said it also planned further expansion in Asia and across the world to capture new growth opportunities.
It said its joint venture in China, the China Life AMP Asset Management Company, was the fastest-growing investment manager in China, with assets under management rising 55% year on year.
“International expansion is gaining momentum, particularly in China as well as in Europe and North America,” said Meller.
“AMP’s partnerships with China Life are stronger than ever. Together we are well placed to support the rapidly-evolving investment and pension needs of this growing market,” he added.
