AMP Limited Earnings Call: Growth Momentum With Caveats

AMP Limited ((AU:AMP)) has held its Q4 earnings call. Read on for the main highlights of the call.

AMP Limited’s latest earnings call struck a cautiously upbeat tone, with management highlighting robust underlying profit growth, strong platform inflows and tangible cost cuts, all set against lingering pressure in banking returns and legal overhangs. Investors heard a story of operational momentum and improving capital strength, but one that still carries margin, regulatory and concentration risks that temper the upside narrative.

Underlying earnings and EPS step up

Underlying NPAT for FY’25 climbed about 21% to $285 million, while earnings per share rose more than 25%, underscoring solid profit growth on a comparable basis. Management framed this as evidence that the reshaped group is starting to deliver more consistent earnings power, even as statutory profit remains clouded by legacy items.

AUM growth and platform flow acceleration

Total assets under management increased roughly 9% to $161.7 billion, supported by market gains and improving client activity. Platform net cash flows jumped about 85% to $5.1 billion, reflecting stronger adviser engagement and competitive product offerings that are helping AMP win back share in the advised wealth market.

Revenue uplift and operating leverage

Group revenue expanded around 2.8% year on year, but EBIT grew by more than 21%, highlighting emerging operating leverage. As volumes rise across platforms and investments, incremental revenue is increasingly dropping through to the bottom line, suggesting that the cost base is becoming more efficient at current scale.

Cost reductions and efficiency programs

Controllable costs fell nearly 7% across FY’25, while the group cost‑to‑income ratio improved by more than 6 percentage points. The simplification program is delivering measurable benefits, with Platforms’ cost‑to‑income down over 3 points and Superannuation & Investments (S&I) improving by roughly 5 points, giving management more room to invest selectively.

Partnership income and China earnings engine

Partnership income surged more than 53% to $72 million, largely driven by China Life Pension Company (CLPC) and related ventures. CLPC now manages about AUD 440 billion and has lifted its dividend payout ratio to 35%, meaning these partnerships have become a key profit and dividend support for AMP’s shareholders.

Dividends resume and capital base strengthens

AMP declared a final dividend of $0.02 per share, taking full‑year FY’25 dividends to $0.04 and signalling a return to more regular shareholder payouts. The CET1 surplus improved to $287 million, or about $236 million pro forma after the dividend, and the group has retired credit facilities, reinforcing a cleaner, less leveraged balance sheet.

Product launches and distribution traction

The launch of AMP Bank GO in February 2025 has already attracted around $310 million in deposits, with customer uptake ahead of internal expectations. Across wealth products, Lifetime solutions, Boost, Rewards and digital adviser tools such as MyNorth enhancements and AI filenotes are gaining ground, lifting managed Lifetime AUM to roughly $764 million by year end.

New Zealand and broader partnership diversification

New Zealand Wealth posted NPAT growth of more than 5% to $39 million, achieving improved net cash flows despite headwinds from a weaker NZ dollar. Other partnerships, including CLAAM, paid their first dividends, giving AMP a broader, more diversified earnings stream that is less dependent on its core domestic operations alone.

Margin compression in Platforms and S&I

Platform margins narrowed by around 2 basis points on a net AUM basis, or about 3 basis points gross, mainly due to a shift toward lower‑fee managed portfolios, tiered pricing and fee caps. S&I gross margins also slipped by roughly 1 basis point, with administration fee compression indicating that competitive pricing and mix changes are weighing on profitability.

Bank returns below cost of capital

AMP Bank generated combined underlying NPAT of $55 million, with mortgage growth of 3.8%, below broader system growth, and returns remain underwhelming. The combined bank return on capital fell about 40 basis points and remains well below the cost of capital, while the AMP Bank GO launch and funding decisions have pushed net interest margins lower.

Statutory NPAT dampened by legacy costs

Statutory NPAT was held back at $133 million as the group absorbed $95 million in litigation and remediation expenses and around $50 million post‑tax in simplification costs. These legacy and restructuring items continue to mask the healthier underlying earnings profile, highlighting that AMP is still working through past issues even as the core franchise improves.

Ongoing legal and regulatory uncertainty

Management reported that four class actions tied to the Royal Commission have been settled in principle but are not yet fully finalised, keeping some legal uncertainty alive. A new class action filed in FY’25 has seen little progress so far, reinforcing that regulatory and litigation risk remains a persistent overhang for the investment case.

Concentration risk from partnership reliance

A significant portion of the reported earnings uplift is coming from Chinese partnerships such as CLPC and CLAAM, increasing concentration exposure to a single market. While highly profitable today, this structure introduces geopolitical and policy risk, as any change in performance or payout policies could materially affect AMP’s income profile.

Dividend constraints and conservative payout stance

Management guided to ongoing dividends of $0.02 per half, implying $0.04 per share for FY’26 and FY’27, and flagged limited franking credits as a structural constraint. Any additional capital return is likely to come via on‑market buybacks rather than higher franked dividends, tempering near‑term yield appeal for income‑focused investors.

Visibility on flows and margins remains limited

Despite the sharp improvement in FY’25 platform cash flows, the company declined to give specific net flow targets, citing market and competitive uncertainty. Margin guidance for platforms and S&I is effectively flat at 40–41 basis points and 60–61 basis points respectively, underlining management’s caution on pricing and product‑mix pressures.

Guidance points to measured growth and discipline

For FY’26, AMP is targeting platform margins of 40–41 basis points and S&I margins of 60–61 basis points, reinforcing its expectation of stable but not expanding spreads. AMP Bank GO aims for about $1.0 billion of deposits and bank NIM of 125–130 basis points, while partnerships are expected to deliver about 10% annually, with controllable costs guided to $630–640 million as simplification spending tapers.

AMP’s call painted the picture of a business regaining earnings momentum and capital strength, yet still wrestling with low‑return banking, margin headwinds and lingering legal risk. For investors, the story is one of improving fundamentals, disciplined capital management and cautious guidance, where upside will depend on sustaining flows and margins while gradually resolving legacy and concentration issues.