AMP Bank profit falls as margins drop

Australian wealth manager AMP Ltd said on Thursday its half-year profit fell by nearly a quarter as margin pressure weighed on the performance of its banking division.

In the first half of the year, the net interest margin at the AMP Bank fell to 1.32% from 1.62% a year earlier, and was dragged down by growth in fixed-rate loans, which are less profitable.

Margins started to recover thanks to interest rate hikes from the Reserve Bank of AustraliaBank of Australia, the company said.

Since 2018, AMP has been trying to repair its reputation after a public financial sector inquiry exposed systemic wrongdoing at the company, including charging customers for services it did not provide and misleading regulators.

The 173 year-old company reported a underlying net profit of A $117 million for the six months ended June 30, compared to A $155 million a year ago.

Net cash outflows from the firm's flagship fund management arm decreased to A $2.7 billion, from A $4 billion a year earlier, as the underlying NPAT fell 45.2% to A $46 million $32.57 million.