March 1 () - S&P Global Ratings on Friday said it had downgraded Australian wealth management firm AMP Ltd to 'A-' from 'A' and lowered its ratings on the group's operating units by one notch.
S&P Global also lowered its ratings on associated debt of the largest Australian wealth manager by a notch, while placing all the ratings on 'CreditWatch' with negative implications.
"The downgrade reflects the weakened stand-alone credit strengths of AMP Life Ltd and the support it provides to the group credit profile," the ratings agency said in a statement.
S&P Global said the 'CreditWatch' placement on the group was due to uncertainty regarding the future credit quality of AMP after the sale of AMP Life to Resolution Life Australia Ltd.
"The CreditWatch placement of AMP Life reflects our uncertainty regarding future support, or negative intervention, from its new owner, now that completion of the sale is more certain," the rating agency noted.
The embattled wealth manager reported cash outflows of A$3.97 billion (US$2.8 billion) in 2018, equivalent to about 3 percent of assets under management. That compared with inflows of A$931m in 2017.
AMP had said that the client withdrawals from its flagship wealth management unit showed no sign of abating and warned legal and compliance costs would hit 2019 earnings.
The 170-year-old company has lost over half its market capitalisation in the past 12 months as a result of the Royal Commission inquiry.
The company is haemorrhaging funds after a public inquiry into the financial sector heard it had engaged in conduct such as charging fees for no service and attempting to deceive regulators.
Last month, Moody's Investors Service downgraded AMP Life to 'A2' from 'Aa3', and said outlook for the firm remained negative.