AMP has reported a 15% drop in first-half net profit to $445 million from $523 million a year earlier. In underlying terms - a measure which removes the impact of one off events and focusses on the underlying performance of the business - profit rose by 4% to $533 million, compared to $513 million in the previous corresponding period (pcp).

The main part of AMP’s operations is the Australian wealth management business which provides superannuation, retirement income, investment, SMSF software and administration and financial advice services. Earnings for this segment in the first half of 2017 fell by 1% or $2 million compared to the pcp, to $193 million. AMP said the result was driven by higher investment expenses from a new investment management agreement with AMP Capital – its fund manager. The new agreement increases the base fees that are charged in lieu of performance fees. Underlying investment income fell $11 million to $50 million compared to a year ago, influenced by less favourable tax outcomes. Cash inflows totalled $1,023 million, an increase of 76% from the same time a year ago. The retail and corporate super platforms were positively impacted by recent changes to super contribution limits and large mandate wins.

There were solid performances in the form of AMP Capital, AMP Bank & Australian Wealth Protection businesses. Each segment delivered a 10% increase in operating earnings. The largest of these operations, AMP Capital, reported a better than expected 10.8% increase in earnings to $92 million. AMP Capital manages investments across a range of asset classes including equities, fixed interest, infrastructure & real estate. AMP Capital holds a 15% stake in China Life AMP Asset Management, which provides retail and institutional services to the Chinese market. AMP Capital’s operating earnings were driven by increased fee income, which grew 8% over the period to $348 million, balancing a 3% increase costs. This reflects higher employee costs as the business grows through initiatives such as the expansion of AMP Capital’s international business.

Additionally, earnings in the Australian wealth protection unit increased by 11%. The Australian Mature business which is the largest (closed) life insurance business in Australia oversaw an 8.7% increase in earnings to $75 million, helped by improved outcomes in investment markets and lower controllable costs. The New Zealand financial services business, whose services include insurance and wealth management saw earnings rise 4.8%.

AMP declared an interim dividend of $0.145, up from $0.14 in the pcp. The record date for the payment is 24 August 2017, the ex-dividend date is 23 August 2017, with the payment to be made on 29 September 2017.

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