FY 23 - AMP Limited - Chair's message to shareholders
14 February 2024
During 2023, AMP successfully continued its path to becoming a customer focused and purpose led business. We have repositioned AMP for the future, with the final sale of AMP Capital complete, the resolution of significant legacy legal matters and a simplified portfolio of businesses.
As Chair, I am very conscious of the importance of corporate culture, and how critical it is to foster an inclusive and empowering work environment that enables our people to best support our customers. AMP’s purpose, helping people create their tomorrow, continues to guide the organisation and the board is proud of the way our people are supporting our customers in the current difficult economic environment.
Underlying net profit of $196m for the year was up 6.5% on FY 22, with statutory net profit for the year of $265m. AMP’s operating businesses experienced demanding economic conditions, however management held to their clear strategy to focus on the performance of the operating businesses, and maintained a disciplined approach to controlling costs.
The operating environment for banking is particularly challenging. AMP Bank’s new digital small business banking proposition, to be launched in early 2025, is designed to address funding constraints in the medium and longer term, as well as diversifying the revenue mix. In Platforms, AMP’s innovative MyNorth Lifetime product has been internationally recognised in the industry for its contribution to a solution to financial challenges faced by retirees – an important contribution to the economy and society.
The Advice business continues to progress towards breakeven, while in Master Trust, the simplification of the business continues while delivering returns in excess of 11.5% for superannuation members. The New Zealand business continued to deliver steady, good quality returns.
Capital management and dividends
We have a strong balance sheet and returning capital to our shareholders remains a priority. In August 2022, we committed to returning $1.1bn to shareholders, and to date have returned $750m via an on-market buyback and dividends.
Today I am pleased to announce a FY 23 final dividend of 2.0 cents per share, franked at 20%. This commences the $350m tranche 3 of the capital return, with the remainder to be completed via further dividends, and/ or an on-market share buyback.
In line with best practice, board succession and renewal based on strategic imperatives remains an important focus, and so I was pleased to announce the appointment of Kathleen Bailey-Lord and Anna Leibel from 1 January 2024. These appointments add further significant skills and experience in digital transformation, technology and financial services to the board – key enablers for AMP’s future success.
At the end of the year, Kate McKenzie stepped down from her role on the AMP Board to focus on her other board commitments. I’d like to thank Kate for her dedication and expertise during her three years working with the board through AMP’s transformation.
Board gender diversity continues to meet our 40:40:20 target (currently 50:50 NEDs; 56% female with CEO). Board composition has also considered relevant diverse backgrounds and experience, and we actively engage with experts and representatives of broader stakeholder groups as required.
During the year we made some important changes to our remuneration structure to incorporate feedback from stakeholders while remaining compliant to regulatory requirements. We believe that these changes are appropriate for a business of AMP’s size and continued complexity as it operates in both the highly regulated banking and superannuation markets. We continue to respect and respond to feedback in order to achieve a balance between stakeholder expectations, and attracting and retaining high-performing talent. These changes are covered in our remuneration report.
Community and sustainability
Our purpose highlights the important role that AMP plays in the community as a financial services provider, employer, and, more broadly, our economic and social contribution. We recognise that every dollar we manage is connected to someone retiring with dignity, and every mortgage we provide in AMP Bank is connected to someone purchasing a home. Our Advice and Platforms businesses play an important role in providing financial confidence for people to optimise their financial security.
In 2023 we celebrated the 30th anniversary of the AMP Foundation. To mark the occasion the Foundation awarded two $1m grants to the not-for-profit social enterprises First Australians Capital and Global Sisters. We are all immensely proud of what the AMP Foundation has achieved, as one of Australia’s largest, independently funded corporate foundations.
In 2023 we also launched AMP’s Stretch Reconciliation Action Plan, reinforcing our strong commitment to work collaboratively with Australia’s First Peoples to promote financial wellbeing and implement reconciliation initiatives within our organisation and the broader community.
During my tenure as Chair, AMP has undergone a significant transformation to set the company up for a sustainable future. We have a strong CEO and management team in place; the business and strategy is repositioned; the AMP portfolio is simplified; the capital base is strong; and substantive legacy issues are resolved.
After almost five years on the board, three as Chair, the time is now right for me to hand over to the next AMP Chair, and I will retire at the conclusion of the Annual General Meeting in April, handing over to Mike Hirst.
I have worked closely with Mike since he joined the board in July 2021, and he has already made a significant contribution to AMP as a Non-executive director. Mike has deep financial services knowledge and expertise, and the board unanimously supported his appointment. I wish Mike and the board every success, and I thank them for their exceptional commitment and contribution over the past challenging three years.
Finally, I would like to thank our shareholders for your support for AMP. It has been a privilege to serve as Chair. I look forward to watching AMP’s future progress, and retire knowing the business is well repositioned for the future.
To read more about our 2023 full year results, click here