AMP Capital lifts full-year fee income by 34%

AMP Capital Investors (New Zealand), the local unit of the Australian wealth manager, posted a 34 percent jump in fee income last year as it benefited from funds taken over from Axa Asia Pacific and improving market values.

The Wellington-based funds manager had fee income of $49.1 million in calendar 2012, up from $36.8 million a year earlier, according to its financial statements.

AMP acquired Axa Asia Pacific for $A13.3 billion in 2011, selling back the Asian units to French parent Axa SA. For AMP Capital NZ, the effect of the acquisition was to lift funds under management to about $17 billion in stocks, bonds and property as at May 31 this year, from about $13 billion early last year, before Axa was consolidated.

“Those assets came into our business and on top of that market values have increased,” George Carter, AMP Capital NZ head of distribution, says.

The annual report shows the firm’s investment management fee expense rose to about $17 million from $9.3 million, which Mr Carter said reflected the fact that Axa outsourced some funds management to third parties.

The firm posted a net loss of $12.7 million compared with a year-earlier profit of $5.2 million, after recognising an $18.5 million impairment in the value of management contracts and a $6.6 million accounting adjustment on the fair value of financial assets.

AMP stopped using the Axa brand this year, having merged their default KiwiSaver schemes.

At AMP’s annual shareholders’ meeting last month, chief executive Craig Dunne said the company had increased the annual revenue and cost savings benefits from the merger to $A150 million from an initial estimate of $A120 million.

“We are unquestionably a stronger, more competitive organisation post-merger than either company was as a standalone firm,” he said.

AMP Capital’s total funds under management were about $A130 million as at March 31.

AMP shares last traded at $A5.02 on the ASX and have gained about 28 percent in the past year. The stock is rated a ‘hold’ based on a Reuters poll of 15 analysts.

(BusinessDesk)