Australia's AMP logs $1.3 billion in quarterly outflows

Credit: REUTERS/DAVID GRAY

AMP Ltd said on Thursday outflows in its Australian wealth management unit rose 30% in the third quarter, as damaging revelations of misconduct from a sectorwide inquiry continued to drive clients away.

Adds CEO comment, background

Oct 24 (Reuters) - AMP Ltd AMP.AX said on Thursday outflows in its Australian wealth management unit rose 30% in the third quarter, as damaging revelations of misconduct from a sectorwide inquiry continued to drive clients away.

For the quarter ended Sept. 30, the division recorded net outflows of A$1.94 billion ($1.33 billion), against A$1.49 billion worth of outflows a year earlier.

In August, AMP posted its biggest half-year loss since its listing and withheld dividend for the first time, a year after the Royal Commission inquiry found that the company had for years wrongfully charged fees and had attempted to mislead the regulators.

"We have achieved stronger inflows during Q3, reflecting our improved fee competitiveness, but also higher outflows as the new Protecting Your Super legislation was implemented in Australia," AMP Chief Executive Officer Francesco De Ferrari said.

The Australian government released legislation aimed at reducing insurance and fee costs for customers, including requiring companies to transfer inactive low-balance accounts to the Australian Taxation Office and cancel insurance for inactive members.

Total assets under management for the Australian wealth management unit at end-September rose to A$133.2 billion, compared with A$132.70 billion as of June 30.

The quarterly results are the first since AMP vowed to 'draw a line in the sand on the issues of the past' and announced a dramatic turnaround plan in August, which included a capital raising and an A$2.35 billion write-down on the wealth-management business.

Earlier this month, the company said it would merge its banking and Australian wealth management units into a combined business called 'AMP Australia' as part of the turnaround plan aimed at making the firm more customer-focused.

($1 = 1.4592 Australian dollars)

(Reporting by Rashmi Ashok in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)

((Rashmi.Ashok@thomsonreuters.com; +918067491689;))

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