AMP First-Half Profit Jumps 57% on China Venture and Wealth Management Growth

AMP Limited (ASX: AMP) announced a 57% increase in statutory net profit for the first half ended June 30, as strong results from its China partnerships and wealth management platforms more than compensated for a weaker performance in its banking division. The Australian financial services firm also rewarded shareholders with an increased dividend and a new share buyback program.

Key Financial Highlights

The company reported a statutory net profit after tax of A$154 million, a significant rise from the A$98 million recorded in the same period a year earlier. AMP's preferred metric, underlying profit, also saw robust growth, climbing 32.8% to A$174 million.

Key performance indicators from the half-year report include:

• Revenue: Increased 4% to A$1.425 billion.
• Underlying Earnings Per Share: Rose to 6.9 cents from 5.2 cents.
• Underlying Return on Equity: Improved to 9.8% from 7.4%.
• Cost-to-Income Ratio: Strengthened to 60.5% from 63.0% a year prior.

Segment Performance

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The primary driver of the earnings beat was a substantial contribution from AMP's international partnerships. The profit contribution from its China partnerships, primarily through its stake in China Life Pension Company, surged 107.4% to A$56 million. This, combined with higher investment income, propelled profit in the Partnerships & Group segment to A$43 million from just A$2 million in the prior corresponding period.

The company's largest division, Platforms, delivered a 15.1% profit increase to A$61 million, benefiting from positive net cashflows and favorable market conditions. However, these gains were partially offset by a 33.3% decline in profit from AMP Bank to A$20 million, attributed to continued investment in its digital banking offering. Total assets under management (AUM) across its key wealth divisions grew 8.9% to A$167.6 billion.

Capital Management and Shareholder Returns

Reflecting the strong results and its improved financial position, AMP's board declared an interim dividend of 3.0 cents per share, franked at 20%. This is an increase from the 2.0 cents per share final dividend paid for the previous period.

Furthermore, the company announced it will launch a second on-market share buyback tranche of up to A$150 million. This follows an earlier buyback and brings the total planned for 2026 to as much as A$300 million, signaling confidence in the company's outlook and a commitment to returning capital to investors.