AMP shares: where next as ‘AMP Australia’ restructure announced

Simplicity was always the answer, apparently. That is, to simplify, strengthen and scale the AMP business model. A future-proofing, forward-thinking tour de force.

Specifically, AMP (ASX: AMP) is now set to combine its Bank and Australian Wealth operations under a single ‘AMP Australia’ umbrella.

Indeed, as we previously reported, in the scheme of things AMP:

‘Will look to significantly decrease its reliance on its wealth management arm; while aiming to increase the profitability of both AMP Bank and AMP Capital.’

So today’s restructuring news is really not much of a surprise.

Details of the restructure

Sally Bruce, who previously led AMP Bank, will step down from her role. In her place, Alex Wade, who joined AMP just 10 months ago – starting in the role of chief executive of AMP's Wealth Management arm – will head the newly minted ‘AMP Australia’.

Speaking of this announcement, AMP’s CEO, Francesco De Ferrari commented that the aim here was to bring:

‘Together our bank and wealth management teams in Australia will drive a more integrated organisation better able to pursue the significant opportunity we see in providing more holistic wealth services for our clients.’

Mr De Ferrari added that:

‘Closer integration of the businesses was part of our long-term plan, and with Sally's decision to step down we have been able to accelerate our internal re-organisation.’

CHOICE and the AMP share price

The bumpy road for AMP’s share price has continued today, after the stock fell 0.62% to hit A$1.59 per share, by the late afternoon.

Six months ago the AMP share price traded at the A$2.21 mark; one year ago at the A$3.05 mark. For reference, at its peak, AMP would have set you back around A$10 per share.

Beyond share price gyrations and according to Bloomberg Data, analysts don’t seem fully convinced of AMP’s simplified strategy: just 15.4% of analysts rate AMP a buy, 53.8% a hold and the remaining 30.8% see the troubled company as a sell.

The highest price target comes from Everblu Capital, which has a buy recommendation and a lofty price target of A$2.48 on the stock.

Bell Potter’s outlook is significantly more dour, rating the stock a sell. A price target of A$1.32 says all that needs to be said on their outlook.

Maybe worse still was today’s announcement from CHOICE, that:

‘This year’s Shonky goes to AMP for its grossly underperforming superannuation division, which has the lowest customer satisfaction ratings on record and boasted no fewer than a million-plus inactive accounts across its AMP Retirement Trust and Super Savings Trust products in 2018.’

Watch this space.

Practise trading AMP and other Australian stocks with an IG demo account now