AMP NZ financial services division grew its profit margins a tad over 11 per cent in the year to end December 2014 on the back of rising KiwiSaver inflows, favourable currency movements and cost-squeezing on its life insurance division.
AMP annual accounts, published last week, reveal the group’s net KiwiSaver inflows of A$343 million were up 41 per cent (or A$100 million) over the 12 months to December 31, 2013. Despite the flow gush, AMP’s KiwiSaver market share fell from 16.3 per cent in December 2013 to 13.9 per cent a year later.
Net outflows of A$73 million in AMP’s non-KiwiSaver investment business saw overall net funds flow reduce to A$270 million for the year. In the previous annual period the group’s non-KiwiSaver investments saw net outflows of A$163 million.
Total AMP NZ assets under management increased by 7.3 per cent, or about NZ$900 million with KiwiSaver (which grew assets 20 per cent over the period) contributing two-thirds of that figure.
Over the 12 months to December 31, 2014, AMP NZ financial services reported a profit of A$88 million. Including a A$19 million ‘transitional tax relief’ item and A$3 million life insurance ‘experience’ profits, total operating earnings hit A$110 million (or NZ$120 million) – a jump of 13.4 per cent on the previous year, much of which was attributed to the strengthening NZ dollar against its Australian counterpart.
“The 8% average depreciation of the A$ against the NZ$ in FY [full year] 14 from FY 13 accounted for A$8m of the A$13m increase in operating earnings,” the AMP profit announcement says.
Profit margins fell in the second half of 2014 to $42 million compared to $46 million in the previous six-month period, primarily “reflecting the timing of project spend and reduced pricing on AMP’s KiwiSaver”.
The transitional tax relief (booked by AMP at A$19 million), introduced to ease New Zealand insurance companies into a new compliance regime, expires this July.