Australia’s AMP Puts All Assets On The Table, Sparking Break-up Talk

SYDNEY: Australian financial advice giant AMP Ltd said on Wednesday it was putting all its assets under review, setting in motion a potential sale or break-up of a company that has seen its profit and reputation weakened after years of scandals.

The veteran manager of Australian retirement savings said it hired investment banks Credit Suisse and Goldman Sachs to review all its business units after “an increase in interest and inquiries”.

Just two days earlier, the 160-year-old company was overtaken as the country’s biggest wealth advisor network when rival IOOF Ltd said it was buying the advice arm of National Australia Bank Ltd.

“We have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value,” AMP Chair Debra Hazelton said in a statement.

A sale or breakup could mean the end of a household name in Australian retail finance.

Its reputation plummeted after a public inquiry into the financial sector exposed systemic wrongdoing such as the charging of fees for no service, leading to the exit of its chair and CEO in 2018.

It has failed to put those scandals to bed and only last week it lost another chairman over its handling of an employee misconduct complaint.

Through it all, AMP has seen its funds under management shrink as clients abandoned ship and, more recently, the coronavirus crisis wreaked havoc on the markets.

AMP shares were up as much as 5% in morning trading on Thursday, against a broader market gain of 1%, as investors bet on the likelihood of a sale of some or all of the busines.

“They’re probably trying to get an offer for their financial planning business,” said Hugh Dive, chief investment officer at Atlas Funds Management.

“They saw what happened with IOOF and MLC and they’re hoping to shake out some interest.”

Dive did not expect AMP to push for a sale of its wealth management division, AMP Capital, which he said was seen as “the jewel in their crown, the only part of the business that’s consistently profitable.”

Like much of the Australian finance sector, AMP has been selling assets to simplify and minimise regulatory headaches. It sold its life insurance unit this year, although it scrapped plans to offload its New Zealand wealth management arm after offers fell short of its expectations due to the pandemic.

Goldman Sachs declined to comment, while a Credit Suisse representative was not immediately available for comment.

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