AMP CEO Alexis George
Growing above system on the asset side, AMP Bank is barely growing at all on the deposit side.
It’s an interesting series of dilemma for AMP. Wondering where its growth engines in banking will be found is only one of them.
The chief of these dilemmas is whether to offload the bank for the best it can get, or stay the course and thrive and succeed in banking.
AMP Bank’s profit was A$57 million over the June 2023 half year, up from $46 million in the prior half.
This represents more than half the underlying profit of AMP for the half year.
Mortgage growth was 1.1 times system over a year, but deposits barely moved.
The return on capital for AMP Bank was 9.8 per cent this half, up from 8.5 per cent in the prior half.
AMP has surplus capital, but the board is nervous about its sufficiency in the face of two well-aimed class actions.
So AMP has put the third tranche of its share buyback program “on pause” with the market promised an update by the end of December.
Is AMP’s capital best deployed in banking? And if the answer is yes, how much bigger and faster can AMP Bank grow?
How weighty will banking be in AMP’s earnings and capital allocation in five to 10 years’ time?
AMP will probably be keeping its bank, but would be wise to go looking for a buyer.