AMP has posted a steep full-year loss and shareholders will not receive a dividend, but chief executive Francesco De Ferrari could be in for a bigger pay packet.
The embattled financial services firm, which is still dealing with the fallout of the banking royal commission, made a $2.5 billion loss in 2019, as it took $2.4 billion in impairment charges to “address legacy issues”.
Underlying profit slumped by 32 per cent to $464 million, compared to $680 million in 2018.
More client money was pulled out of its Australian wealth-management business, with AMP citing “ongoing reputational impact and strong competition”.
Over 2019, the unit posted outflows of $6.3 billion – $2.4 billion of which was for pension payments.
The company will not pay a dividend but said it would review shareholder payouts after it completed the sale of its life insurance division.
However, the AMP board increased Mr De Ferrari’s maximum potential short-term bonus to 200 per cent of his fixed base salary, which was set at $2.2 million when he was appointed in 2018 – up from a previous maximum of 120 per cent.
AMP has continued to pay back clients for misconduct aired during the royal commission and fees charged for no service.
“We expect to have completed 80 per cent of the program by the end of FY20, with completion in 2021, as we have consistently guided,” Mr De Ferrari said.
In January, the ABC revealed AMP had opened new superannuation accounts for customers who were owed compensation arising out of the fees-for-no-service scandal, but had closed their accounts.
Telstra’s profit falls 7.6 per cent
Telstra has reported a 7.6 per cent fall in profit in the first half of the financial year.
The telco’s net profit decreased to $1.1 billion, as it continued with its so-called T22 strategic overhaul, including cutting jobs.
The number of total full-time staff fell by 10 per cent to 28,270.
The rollout of the National Broadband Network continued to bite, with Telstra’s fixed-line revenue falling nearly 11 per cent to $2.4 billion.
Mobile revenue marginally increased, by 0.3 per cent, to $5.3 billion.
Telstra took a one-off hit of about $10 million related to the bushfires during the six-month period and flagged the total impact would be in the order of $50 million.
Shareholders will receive an interim dividend of eight cents per share, including a three-cent special dividend.