AMP Bank has increased its total loan book by $0.6 billion to $23.3 billion in Q322, underpinned by its continued strength in its ratio of deposits to loans, which is at 89%.
The bank’s net cash inflows increased to $363 million in Q322 from $205 million in Q321. Meanwhile its Australian Wealth Management (AWM) net cash outflows of $0.8 billion in Q322 improved from net cash outflows of $1.9 billion in Q321.
AMP Bank’s New Zealand wealth management division delivered positive net cash inflows of AU$23m in Q322, compared to improving net cash outflows of AU$39 million in Q321, driven by increased net cash inflows from KiwiSaver and lower net cash outflows from other products.
“AWM assets under management decreased to $121.4 billion during Q322 compared to AU$125.1 billion in Q222 of $125.1 billion,” said AMP chief executive Alexis George (pictured above).
“This was driven predominantly by lower investment markets, as well as net cash outflows. Management rights of the $8 billion AMP Capital Wholesale Office Fund (AWOF) recently transferred from AMP Capital to a new manager and will be captured in Q422 cashflow and AUM reporting.”
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George said AMP Bank had made strong progress in the most recent quarter which was reflected in the cashflows announced by the bank.
“While challenging investment markets continued to have an impact on assets under management, we have seen a significant improvement in our cashflows as more customers choose to join or stay with AMP,” she said.
“Our bank continues to grow above system with both the loan and deposit books increasing in a competitive market. As homeowners begin to feel the impact of interest rate rises, our focus remains on supporting customers with competitive home loan and deposit rates and maintaining our high-quality credit position.”
George said AMP Bank had seen a reduction in cash outflows to other superannuation funds.
“However, we are winning new customers on our North platform which has continued to grow cashflows from independent financial advisers which is a key strategic focus for AMP,” she said.
“Looking ahead to the fourth quarter, we have already launched our digital mortgage and unique-to-market retirement offer. These are important strategic deliverables that will support AMP’s longer-term growth and deliver on our purpose to help people create their tomorrow.”
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On October 13, AMP Bank released new research which found 64% of Australian homeowners were worried about rising interest rates.
The growing concern of mortgage holders meeting mortgage payments was being felt most acutely by younger Australians, with those who had purchased a home in the last 12 months – a period when property prices were at record highs.
The research also found 74% of homeowners aged 44 and under were particularly concerned about their finances and 58% of homeowners have had to stretch their household budgets to make ends meet.
AMP Bank group executive Sean O’Malley said mortgage repayments currently ranked as the largest expense for 68% of homeowners.
“In addition to budget cuts, 43% of homeowners are considering refinancing their home loan in the next year, with the desire to get a better rate cited as one of the main motivators,” O’Malley said.
“Younger Australians are more open to refinancing with 57% saying they were considering it, which is well above the national average. Among those considering refinancing in the next year, 19% said the complexity of the process was top of mind as a barrier and 13% cited the time commitment required to refinance as a barrier.”
