New Zealand holds the line as as AMP suffers worldwide fall

By Christine Nikiel in Sydney

Friday 1st March 2002

AMP PROFIT SUMMARY

	2000 $Am	2001 $Am

AMP Financial Services (Australia and NZ)	350	393
UK Financial Services	264	328
Henderson Global Investments	216	208
AMP General Insurance	39	17
Core recurring operating margins	823	938
Investment income	617	(26)
Discontinued business	(22)	109
Total operating margins	959	1115
Corporate and other expenses	(128)	(102)
Interest expense on corporate debt	(278)	(242)
Other items after tax	(3)	-
Operating profit after tax and other items	1152	690

Australian financial services operator AMP wants to edge into this country's already crowded retail banking market - with an emphasis on virtual banking.

Chief executive Paul Batchelor said retail banking was a niche the company could fit into, and as margins tightened internet banking would be the way to go.

The company reported a $A690 million net profit after tax and other items this week.

The result, for the December 2001 year, was in line with analysts' predictions of the sharp fall flagged in January when the company said investments might be "marginally negative."

Mr Batchelor marked the September 11 terrorist attacks on the World Trade Center as a major factor in the drop in investment income - in 2000 the company made a profit of $A1.1 billion.

"Last year was the toughest I've seen in my 30 years in business," he said.

The company shed a lot of dead wood last year, freeing about $2 billion in capital. But rather than make more acquisitions, the company's strategy would be to focus on alliances and joint ventures where a foot in a market door would make things easier, Mr Batchelor said.

The company's performance in this country was slightly down on last year, recording a profit of $NZ46.9 million compared with last year's profit of $NZ47.6 million.

This was mainly driven by a rise in share of total superannuation net assets under management, from 14.5% at the end of 2000 to 16.9% at the end of 2001, and net policy cashflows of $NZ226 million.

AMP was committed to superannuation in this country, and while nothing would happen before the next election, the government certainly wasn't closing the door to superannuation discussions, Mr Batchelor said.

New Zealand is known as the incubator for AMP's new products and technology, something it should leverage off quickly in the face of competition from India and China, Mr Batchelor said. AMP is New Zealand's largest funds manager with $11 billion under management, almost 25% of the entire market.

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