AMP, the Australian financial services company, has announced a significant drop in its net profit for the first half of the year. The company’s net profit fell by 44%, reaching 261 million Australian dollars (US$170.50 million) compared to 469 million Australian dollars in the same period last year.
Provision Made in Response to Court Judgment
The decline in net profit was primarily attributed to a provision made by AMP due to a recent court judgment. The company has booked a 50 million Australian dollar provision in response to a judgment in a financial adviser class action. Chief Executive Alexis George acknowledged the uncertainty surrounding the court’s judgment and other litigation matters, stating that AMP will be adopting a prudent approach with its capital and liquidity. In light of this, the planned capital return, specifically tranche three, will be paused.
Underlying Profit Remains Steady
Despite the decline in net profit, AMP reported that its first-half underlying profit of 112 million Australian dollars remained in line with the previous year’s performance. This achievement demonstrates the company’s resilience amidst challenging market conditions.
Interim Dividend Declared
In a positive development, the directors of AMP have declared an interim dividend of 2.5 Australian cents per share. It is noteworthy that no interim dividend was proposed during the same period last year.