AMP chief executive Alexis George said the company would review the pause on the third tranche of its capital return plan by the end of the year.Credit:Oscar Colman
“I’m not going to put any[cost saving] targets into the market that I don’t believe we can deliver on,” she said. “We’ve got a plan in place to make that happen,but there’s investment required of $120 million to $150 million over the next two years as well.”
While AMP’s plans to simplify the firm’s technology,reduce property costs and rein in project spend were broadly welcomed by the market,the company’s announcement that it would pause the third stage of its capital returns program indicated some caution.
Shares in AMP dropped briefly in early trade before closing 4.6 per cent higher at $1.15 a share.
The company is awaiting orders from the Federal Court after it lost a financial-adviser class action in July.
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“Given the current uncertainty around the court’s judgment and other litigation matters,we are taking a prudent approach with our capital and liquidity and will pause tranche three of the capital return,” George said. “We will review the decision to pause tranche three by no later than the end of the year.”
The class action,for which AMP has booked a $50 million provision,was brought against AMP by financial advisers who said they were entitled to be awarded damages by AMP over thereduced prices it offered to pay to buy their financial planning businesses.