The embattled financial services manager AMP Ltd (ASX: AMP) share price is rising today after the business provided a Q3 update.
Currently, the share price is up 3.57% to $1.16.
AMP operates four divisions: Australia Wealth Management (AWM), New Zealand Wealth Management (NZWM), AMP Bank and AMP Capital.
AMP share price
Wealth management saved by market movement
AWM assets under management (AUM) remained flat over the quarter at $131.2 billion.
Overall, the division recorded net outflows of $1.4 billion however this was offset by market movement.
Net inflows equal incoming money such as member superannuation contributions and rollovers minus any outflows such as redemptions or pension payments.
Market movement refers to the underlying value of the assets held. If the overall value of the assets increase, so does AUM.
Positively, AMP’s wealth platform product North – a direct competitor to Netwealth Group Ltd (ASX: NWL) and Hub24 Ltd (ASX: HUB), recorded net inflows of $1.7 billion on the back of pricing reductions and advisor inflows.
It was a similar story for NZWM, with markets gains offsetting outflows.
Kiwisaver – equivalent to superannuation in Australia – chose not to renew AMP’s status as a default provider.
AMP Bank outperforms system
The total loan book for the bank grew $300 million to $21.3 billion driven by strong owner-occupied pricing.
Over July and August, residential loan growth exceeded the lending market by 1.1x.
AMP Capital net outflows accelerate
AUM reduced 4% to $180.3 billion as a result of $12.0 billion in net outflows. For the same period in 2020, the business incurred net outflows of $2.4 billion.
AMP Capital lost a $9.6 billion mandate to an index based environmental, social and governance (ESG) fund.
A further $2.4 billion was the result of redemptions and subsequent asset sales.
AMP Capital is set to be demerged from the broader AMP group in the first half of 2022.
Is this the bottom for the AMP share price?
It’s been a torrid run for AMP shareholders, with the share price reaching as low as $0.92 in 2021.
The market was obviously impressed with the result, despite the net outflows.
Is this the bottom for the AMP share price?
Possibly. The 170-year old bank still has broad brand recognition and notable assets.
AMP is worth something. What that is, I’m not too sure. I focus on businesses that are growing, or at least not incurring successive net outflows.
The company looks cheap on traditional value metrics. But I’d be avoiding AMP for now, along with these other two cheap ASX shares.
