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- AMP (AMP) expects a $4 billion hit to its funds under management following the termination of its contract with Woolworths
- Over Q1 FY22 the company saw “signs of growth and momentum” following improved net cash outflows of $1.3 billion, down from $2 billion in the same time last year
- However, Woolworths has concluded AMP’s mandate as its corporate super provider which is expected to generate a one-off impact of $4 billion in cash outflows
- The mandate exit is set for the first half of 2023 and AMP doesn’t anticipate it will have a material impact on profitability
- Shares have been trading 1.7 per cent higher at $1.21 at 1:28pm AEDT
AMP (AMP) sees signs of growth and momentum over the first quarter of this financial year but warns of a future $4 billion hit to its funds under management.
Over its first quarter of the 2022 financial year, the wealth management company saw its banking sector loan book grow by $500,000 to $22.6 billion.
Total deposits also increased by $1.7 billion to $19.5 billion.
Most of the flows were reportedly sourced from customer deposits, which the company said was in line with its objective to further strengthen its liquidity.
Following improved net cash outflows of $1.3 billion, down from $2 billion in the same time last year, Chief Executive Alexis George said the company is starting to see “positive signs of growth and momentum”.
AMP also boasted an increased focus on growth of its retail banking and wealth business, following the sale of Collimate Capital’s real estate and infrastructure equity businesses.
However, Woolworths has pulled its contract with AMP for superannuation services which is expected to generate $4 billion in cash outflows.
The conclusion of the mandate is expected in the first half of 2023 which AMP said isn’t anticipated to have a material impact on profitability.
Shares were trading 1.7 per cent higher at $1.21 at 1:28 pm AEST.
