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No matter how hard it has tried to change its business and culture, financial giant AMP (ASX: AMP) has not been enough to stop the company from posting a $2.5 billion net loss for FY19.
Now well and truly post-Royal Commission AMP has struggled to regain customer and shareholder support over the year as it continues to deal with the fallout from the fees for no service (FFNS) scandal.
The loss is largely due to a $2.35 billion impairment taken in 1H19, because the company saw its revenue rise by 186 per cent to $23.7 billion.
Despite the losses, which saw its $28 million FY18 profit turn into a loss with an 8,911 per cent decrease, CEO Francesco De Ferrari says the year was "outstanding" for AMP.
"2019 was a year of fundamental reset at AMP," says De Ferrari, referencing the group's strategy refresh announced in August 2019.
"Amid the rest, AMP Capital had an outstanding year, delivering on its long-term global growth plan. Its reputation as a global leader in real assets investment was further enhanced with two of the largest infrastructure fundraisings in the world during 2019."
The company has been on a mission to reshape its reputation in the market, which was shattered by a scathing report by Commissioner Hayne following the Royal Commission into the banking and finance sector.
"In Australian wealth management, we took bold steps on our plans to reshape advice, working with advisers to support them make a decision on their path forward, and ensure our network is professional, productive and compliant," says De Ferrari.
During the financial year the company has been working through a customer remediation program. In the second half the company dished out $190 million to aggrieved customers.
"As promised, we have prioritised client remediation and made significant progress. 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," says De Ferrari.
"In a period of unprecedented legislative and regulatory pressure we have established a strong three-year roadmap for recovery. Our focus is now on delivery."
Breaking its figures down AMP's Australian wealth management was the worst performing part of its business, seeing its operating earnings dive by nearly 50 per cent to $182 million from $363 million.
AMP Capital was the best performing, increasing its earnings by 18.6 per cent to $198 million for the financial year.
As a result of its poor results the company has decided not to declare a final dividend in FY19. The company says it will review this position following the completion of the sale of AMP Life, on track for completion by 30 June 2020.
The sale of AMP Life to New Zealand-based Resolution Life was shot down by the Reserve Bank of New Zealand in July 2019. Resolution Life notified AMP the RBNZ would only approve a change of control application if Resolution Life agreed to have "separate, ringfenced assets held in New Zealand for the benefit of New Zealand policy holders".
AMP now says the legal separation of AMP Life is underway.
Moving forward the company is currently embroiled in a number of class action lawsuits, the latest of which was announced yesterday by Australian firm Shine Lawyers (ASX: SHJ).
The law firm alleges AMP Financial Planning breached its fiduciary and statutory duties to around 100,000 clients by failing to provide objective financial advice and thus failing to act in clients' best interests.
Shares in AMP are down 3.56 per cent to $1.76 per share at 11.04am AEDT.
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