AMP dividend at lower end, $290m provision for remediation

Company News

by Jessica Amir

AMP (ASX:AMP) has advised its accelerating its advice remediation process, which will result in a $290 (after-tax) allowance (provision) in its first half 2018 result. At the same time, it advised its underlying profit for the same period will be between $490 and $500 million.

It comes as ASIC conducted a ‘industry-wide ‘look-back’’ of advice provided from 1 July 2008 and 1 January 2009 and AMP allocated that $290 million for potential advice remediation.

It also advised 700,000 customers will see fee reductions in its flagship My Super products from the third quarter of 2018.

It also increased its risk management systems and controls, which will cost the group $35 million (after-tax) every year over the next two years.

As a result, its dividend will be at the lower end of its FY18 payout ratio guidance of 70 to 90 per cent 

Shares in AMP (ASX:AMP) closed 1.70 per cent lower at $3.48 yesterday. 

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter.