More annual reports from AMP Ltd.:
2023 ReportPeers and competitors of AMP Ltd.:
Infant Bacterial TherapeuticsAnnual report 2023
Helping
people
create their
tomorrow
We continue to build on AMP’s
175-year heritage of supporting
customers to live financially well,
and to meet their needs today
and into the future.
Our strategy enables us to deliver
on our purpose:
Helping people
create their tomorrow
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Contents
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79
Introduction
2023 highlights
Chair’s message
CEO message
How we create value
Our strategy
Sustainability
overview
Group financial
performance
Business review
Material risks
Our approach
to governance
Board of directors
Group executive
committee
Directors’ report
Remuneration report
Financial report
153
Additional
information
About this report
We take our reporting obligations seriously, and we
provide concise and up-to-date information about
AMP at amp.com.au/shares.
AMP’s 2023 Annual report sits alongside a suite
of materials that seek to provide a fulsome update
on our operations and approach to important
matters such as governance and sustainability.
Reporting suite
Sustainability
Report 2023
Modern Slavery
Statement 2023
Corporate
Governance
Statement 2023
ESG Data Pack
2023
The Directors’ report, Financial
report and the Independent
Auditor’s report are dated and
current as at 14 February 2024.
Unless otherwise specified, all
amounts are in Australian dollars.
AMP Limited ABN 49 079 354 519.
Authorised for release by the
AMP Limited Board.
Acknowledgement of Country
AMP acknowledges all First Nations Peoples across Australia.
We recognise the Traditional Custodians of the land and value their
connection to Country, waterways and sky. We pay our respects
to the Elders for their resilience, courage and wisdom; for ensuring
the survival of this country’s rich culture and heritage. Our hope for
the future is to unite as one people, to listen and learn from each
other with respect and walk the path to reconciliation together.
2
2023 highlights
Financial
performance
Business
progress
Our
customers
Our
shareholders
People and
partners
Communities
and environment
$196m
Underlying NPAT
Simplified portfolio
in place
$265m
Statutory NPAT
Significant legacy legal
matters resolved
$744m
Controllable costs
Clear strategic focus
for the re-shaped
business
$2.2b
pension payments for
Australian customers
in retirement
2,700+
members supported
with free, intra-fund
advice on their
superannuation
191,000
customers helped with
their banking needs
441,410
Total shareholders
73
Employee satisfaction
(eSat score)
A–
Leadership rating maintained
on the annual CDP (Carbon
Disclosure Project) benchmark,
which is aligned to the TCFD
framework
$750m
capital return
delivered since
August 2022
FY 23 final dividend
declared of
2.0¢ per share
20% franked
40:40:20
gender diversity targets
met across all levels
including board, middle
management and Head of
>75
More than 75 responsible
investment options available
to clients on MyNorth
Launched a new
Inclusion and
Diversity Strategy,
championed by
the employee
led Inclusion and
Diversity Council
Invested in aspiring
social entrepreneurs
through grant funding
and a 20-week
subsidised social
innovation program
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Chair’s message
Continuing our journey
as a customer focused
and purpose led business
Key results
$196m
Underlying net profit
after tax for the year
$265m
Statutory net profit
for the year
$750m
Returned to
shareholders
2.0cps
Final dividend
During 2023, AMP successfully continued
its path to becoming a customer focused
and purpose led business. We have
repositioned AMP for the future, with
the final sale of AMP Capital complete,
the resolution of significant legacy
legal matters and a simplified portfolio
of businesses.
As Chair, I am very conscious of the importance of corporate
culture, and how critical it is to foster an inclusive and
empowering work environment that enables our people
to best support our customers. AMP’s purpose, helping people
create their tomorrow, continues to guide the organisation
and the board is proud of the way our people are supporting
our customers in the current difficult economic environment.
Financial performance
Underlying net profit of $196m for the year was up 6.5%
on FY 22, with statutory net profit for the year of $265m.
AMP’s operating businesses experienced demanding economic
conditions, however management held to their clear strategy
to focus on the performance of the operating businesses,
and maintained a disciplined approach to controlling costs.
The operating environment for banking is particularly
challenging. AMP Bank’s new digital small business banking
proposition, to be launched in early 2025, is designed to
address funding constraints in the medium and longer term,
as well as diversifying the revenue mix. In Platforms, AMP’s
innovative MyNorth Lifetime product has been internationally
recognised in the industry for its contribution to a solution
to financial challenges faced by retirees – an important
contribution to the economy and society.
The Advice business continues to progress towards
breakeven, while in Master Trust, the simplification of the
business continues while delivering returns in excess of 11.5%
for superannuation members. The New
Zealand business continued to deliver
steady, good quality returns.
Capital management
and dividends
We have a strong balance sheet and
returning capital to our shareholders
remains a priority. In August 2022,
we committed to returning $1.1bn
to shareholders, and to date have
returned $750m via an on-market
buyback and dividends.
Today I am pleased to announce
a FY 23 final dividend of 2.0 cents
per share, franked at 20%. This
commences the $350m tranche 3 of the
capital return, with the remainder to be
completed via further dividends, and/
or an on-market share buyback.
Governance
In line with best practice, board
succession and renewal based
on strategic imperatives remains an
important focus, and so I was pleased
to announce the appointment of Kathleen
Bailey-Lord and Anna Leibel from 1
January 2024. These appointments add
further significant skills and experience
in digital transformation, technology
and financial services to the board – key
enablers for AMP’s future success.
At the end of the year, Kate McKenzie
stepped down from her role on the
AMP Board to focus on her other board
commitments. I’d like to thank Kate for
her dedication and expertise during
her three years working with the board
through AMP’s transformation.
Board gender diversity continues
to meet our 40:40:20 target (currently
50:50 NEDs; 56% female with CEO).
Board composition has also considered
relevant diverse backgrounds and
experience, and we actively engage
with experts and representatives
of broader stakeholder groups
as required.
During the year we made some
important changes to our remuneration
structure to incorporate feedback from
stakeholders while remaining compliant
to regulatory requirements. We believe
that these changes are appropriate
for a business of AMP’s size and
continued complexity as it operates
in both the highly regulated banking and
superannuation markets. We continue
to respect and respond to feedback
in order to achieve a balance between
stakeholder expectations, and attracting
and retaining high-performing talent.
These changes are covered in our
remuneration report.
Community and
sustainability
Our purpose highlights the important
role that AMP plays in the community
as a financial services provider,
employer, and, more broadly, our
economic and social contribution.
We recognise that every dollar we
manage is connected to someone
retiring with dignity, and every
mortgage we provide in AMP Bank
is connected to someone purchasing
a home. Our Advice and Platforms
businesses play an important role
in providing financial confidence
for people to optimise their
financial security.
In 2023 we celebrated the 30th
anniversary of the AMP Foundation.
To mark the occasion the Foundation
awarded two $1m grants to the
not-for-profit social enterprises First
Australians Capital and Global Sisters.
We are all immensely proud of what the
AMP Foundation has achieved, as one
of Australia’s largest, independently
funded corporate foundations.
reinforcing our strong commitment
to work collaboratively with Australia’s
First Peoples to promote financial
wellbeing and implement reconciliation
initiatives within our organisation and
the broader community.
Chair succession
During my tenure as Chair, AMP has
undergone a significant transformation
to set the company up for a sustainable
future. We have a strong CEO and
management team in place; the
business and strategy is repositioned;
the AMP portfolio is simplified; the
capital base is strong; and substantive
legacy issues are resolved.
After almost five years on the board,
three as Chair, the time is now right
for me to hand over to the next AMP
Chair, and I will retire at the conclusion
of the Annual General Meeting in April,
handing over to Mike Hirst.
I have worked closely with Mike since he
joined the board in July 2021, and he has
already made a significant contribution
to AMP as a Non-executive director.
Mike has deep financial services
knowledge and expertise, and the
board unanimously supported his
appointment. I wish Mike and the board
every success, and I thank them for
their exceptional commitment and
contribution over the past challenging
three years.
Finally, I would like to thank our
shareholders for your support for AMP.
It has been a privilege to serve as Chair.
I look forward to watching AMP’s future
progress, and retire knowing the business
is well repositioned for the future.
In 2023 we also launched AMP’s
Stretch Reconciliation Action Plan,
Debra Hazelton
Chair, AMP Limited
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6
CEO message
A year of
progress
“ We have continued to focus on delivering
for our customers, brokers and advisers,
and have been recognised by multiple
industry awards, including a global
award for innovation in retirement
for MyNorth Lifetime.”
AMP Bank is operating in a challenging
and competitive market, and we are
carefully managing volumes in this
business given the impact on margins.
In Platforms, flows from IFAs into our
flagship North platform were up 33%,
and we continue to make progress in
reducing losses in the Advice business.
In Master Trust, lower AUM-based
revenue was offset by disciplined
cost control, resulting in underlying
NPAT in line with FY 22. Our strategic
partnerships also created some
volatility in the FY 23 result, with our
stake in PCCP impacted by US real
estate valuations, and our China
partnership also going through
regulatory change in its market. We see
long-term value in these partnerships,
despite shorter-term volatility. The New
Zealand business continues to deliver
good returns, divesting legacy products
and acquiring a financial coaching
business, enable.me.
What are you doing to support
customers through the current
challenging economic
environment?
I fully recognise the challenges that our
customers, and our people, are facing
in the current economic environment.
I am proud of the way we support
our customers around the two biggest
assets most Australians will ever own
– their home and their retirement
savings. We have an innovative
retirement solution that seeks
to give greater levels of confidence
in a member’s financial position
in retirement, and we will continue
to innovate in this space and advocate
for our customers, members and the
wider community. Our North platform’s
investment menu continues to expand,
providing more choice and flexibility,
and making it easier for advisers
to implement advice strategies
for customers.
We have lowered our superannuation
administration fees for all investment
options, saving our members money
and making our offer more competitive.
We’ve also delivered strong returns
of over 11.5% for the majority of our
MySuper superannuation members.
In 2023, AMP Bank helped over 9,100
customers to buy their own home.
We have improved turnaround times
for loan approvals by 22% (compared
to FY 22), streamlined our application
processes to make things simpler for
our customers and our people, and
been awarded Money Magazine’s
Best-Value Long Term Deposit for
the third year running.
With funding support from the AMP
Foundation, AMP’s partnership with
Good Shepherd supports vulnerable
customers, offering practical solutions
and support to address the root
causes of financial hardship. Since
inception, nearly 500 customers have
been provided with assistance, and
during 2023 emergency food relief and
financial counselling were among the
most widely used support services.
Our customer-focused strategy helps
us to deliver on our purpose: helping
people create their tomorrow.
How is the industry changing and
what does this mean for AMP?
The current moves to review regulation
of the financial advice sector are
sensible and practical and will expand
the delivery of advice to millions more
Australians. AMP has an important
role to play to make a meaningful
difference to the lives of many at a
time when financial advice has never
been needed more. The sooner we
streamline the advice process, the
more affordable and accessible
financial advice will become. We will
continue to work with Government
to progress these important reforms.
With the Government’s Retirement
Income Covenant, AMP is taking a
leading position to ensure that our
members have the assistance they need
when approaching retirement, and
understand how we can support them
in achieving their retirement objectives.
What are you doing to address
the legacy issues AMP has faced?
In recent months, we have worked
hard to settle both the outstanding
shareholder class action, and the
Buyer of Last Resort (BOLR) class
action – these were significant legal
matters that were causing uncertainty
for our business and our supporters.
It was important to achieve a resolution
in both matters. Having reached an
agreement to settle the BOLR matter,
we can build on the work we are doing
to reset the relationship with financial
advisers and look to the future for that
business with a focus on making advice
more accessible to all Australians.
What are your priorities for 2024?
Looking to 2024, the priorities are clear.
We have repositioned AMP, simplified
the portfolio and businesses and have
identified key focus areas for the future.
Our priorities are to drive sustainable
business performance and customer
experience, right-size our cost base
to reflect the AMP of today, and create
new sources of revenue, including our
digital small business bank that will
launch in Q1 2025.
We also remain committed to returning
surplus capital to shareholders. Having
returned $750m since August 2022, I’m
pleased to be progressing with tranche
3 of our $1.1bn capital return program
via our FY 23 final dividend, as well as
further dividends and/or an on-market
share buyback.
And importantly, we must maintain our
focus on delivering on our purpose:
helping people create their tomorrow.
I’d like to thank our shareholders for
their continued support as we strive
to do so.
Alexis George
AMP Chief Executive Officer
Our CEO Alexis George
answers questions about AMP’s
performance in 2023, and looks
ahead to 2024.
What are your reflections on 2023?
2023 was another year of transition and progress for
AMP. We have simplified the business with the completion
of the AMP Capital sales and settled our business portfolio.
We made material progress on sustainable cost reduction
with a committed program over the next two years, and
we have resolved a number of significant legacy legal matters.
The final completion of the remaining AMP Capital sale in
November 2023, as well as the divestment of SuperConcepts
in June, means that AMP is positioned for the future with our
focus on banking and wealth management in Australia and
New Zealand. Our five operating business units are AMP
Bank, Platforms, Advice, Master Trust and New Zealand
Wealth Management – as well as our strategic partnerships.
To reflect our simplified portfolio, during the year we
established a new flattened executive structure with
more business heads involved in setting the strategy.
We are now positioned to look to the future, with a clear
strategy as we continue to simplify the organisation, enabling
AMP to be more adaptable to the changing economic and
competitive landscape.
Importantly, we’ve continued to focus on delivering for our
customers, brokers and advisers. This has been demonstrated
throughout the year with a number of industry awards across
the business, which have recognised MyNorth Lifetime for
innovation in retirement at a global level and AMP Bank’s
digital innovation. The AMP Super Fund won the Momentum
Award at the Annual Super Review Awards in partnership
with SuperRatings, recognising the fund’s transformation
in enhancing member outcomes.
How did AMP’s businesses perform?
AMP’s underlying net profit after tax for the year was $196m,
an increase of 6.5% on FY 22. The board has declared a final
dividend of 2.0 cents per share, bringing the FY 23 Full Year
dividend to 4.5 cents per share, 20% franked. We have a
strong focus on reducing controllable costs to an appropriate
level for the size of our business, and have momentum
on simplification initiatives for 2024. Disciplined cost
management in a period of high inflation remains paramount.
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How we create value
Our enablers
Our business areas
Respect risk
Embed appropriate
governance structures
to maintain robust risk culture
Brand, reputation
and ESG
Driving consistent delivery
of positive outcomes for our
stakeholders: shareholders,
customers, people and
communities
Digital and data
Leveraging digital and data
to better understand and
serve our customers
Purpose and culture
Helping people create their
tomorrow, and living the AMP
values every day
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Platforms
AMP’s flagship
North platform
includes super,
retirement and
investment offers
Master Trust
Super and pension
solutions for
individual and
corporate members
New Zealand
Wealth
Management
Offering super,
retirement, advice
and general
insurance
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Advice
Professional
services for
aligned and
independent
advisers
Bank
Providing home
loans, deposit
and transaction
accounts
Strategic
Partnerships
Including CLAMP
and CLPC in
China, and PCCP
in the US
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Strategy
AMP’s updated strategy provides a framework for AMP to drive
business line profitability; efficiently manage capital and costs;
and create new revenue sources. The strategy seeks to enable
AMP to deliver on its purpose:
Helping people create their tomorrow
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The value we create
For shareholders
441,410
Total shareholders
$750m
capital return
delivered since
August 2022
For customers
$2.2b
pension payments for Australian
customers in retirement
191,000
customers helped with their
banking needs
For our people
73
Employee satisfaction (eSat score)
40:40:20
gender diversity targets met
across all levels including board,
middle management and Head of
For our communities
30 years
of the AMP Foundation celebrated
with $2m donated to charities
supporting women led and First
Nations businesses
10
Our strategy
AMP’s strategy helps AMP to deliver on its purpose: Helping
people create their tomorrow. The strategy was launched in
February 2024, to drive AMP’s next chapter, with a focused
portfolio in wealth management and banking in Australia
and New Zealand.
Our purpose
Helping people
create their tomorrow
Drive business line profitability
and positive customer experience
— Bank: Address NIM compression, reduce costs and improve ROC
— Platforms: Invest in adviser sales and service; embed market
leading retirement solutions
— Advice: Achieve breakeven target; build on strong
practice relationships
— Master Trust: Refine retirement solutions, drive sustainable
performance
— New Zealand: Maintain current performance and continue
to diversify revenue
Efficient capital, cost and balance
sheet management
— Address corporate costs: Right size corporate costs;
simplification and transformation program
— Maintain disciplined capital management: Strong balance sheet,
focused on optimising capital. Reduce net debt as appropriate;
committed to returning surplus capital to shareholders
Create new revenue sources and
lasting points of differentiation
— Digital Business Bank to begin operating in Q1 2025
— Expand on channel opportunities, including building digital
advice capability
— Extend retirement product innovation, leveraging large existing
customer base and breadth of capability across the wealth
value chain
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Sustainability
overview
For 175 years, AMP has had a long tradition of serving the
communities we operate in. Our purpose – helping people
create their tomorrow – guides our actions and decision
making at AMP. For all of our stakeholders, it is about
delivering value and reporting meaningfully on our progress.
People and partners
AMP’s commitment to its people is to create
meaningful opportunities to contribute and deliver
positive outcomes. For our partners, this means
working together to meet the needs of customers.
We expect our people and partners to own their
accountabilities, be brave to try new ways of doing
things and play as one team.
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2023 highlights
Maintained systems and processes
to appropriately manage conduct
and consequences in a fair,
consistent and considered way.
Significant legacy legal matters
were resolved.
Employee satisfaction stable
at 73 despite high level
of organisational change.
Launched a new Inclusion and
Diversity Strategy, championed
by the employee led Inclusion
and Diversity Council.
Improved Adviser satisfaction
rates from 68% to 81% and Broker
satisfaction rates from 69% to 84%
year on year.
i
F
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a
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Customers
AMP’s purpose is reflected in our commitment
to customers, giving them the confidence to take
control of their finances. It means we put customers
first by considering them in all our decisions and
make it as simple as possible for them to achieve
their goals.
2023 highlights
Paid $2.2b in pension payments
to Australian members to help them
in retirement.
Supporting 2,700+ members with
free intra-fund advice on their
superannuation and 5,800+ members
through educational webinars with
employer clients.
Supporting 4,000 members to
access $52.5m in superannuation on
compassionate or hardship grounds.
Implemented a new approach
to feedback from customers
to identify opportunities and take
action to improve.
Helped around 191,000 customers with
their banking needs and provided
more than 9,100 new home loans.
Delivered enhanced Bank digital
capabilities, including self service
card security controls and real
time payments.
Strengthened our cyber and
information security capabilities
and provided training and education
to employees.
Communities
and environment
AMP’s commitment to communities means addressing
the broader impacts of our value chain through our
investments and managing climate-related risks and
opportunities. It is about doing the right thing and
investing in our communities.
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2023 highlights
More than 75 responsible investment
options available to clients on MyNorth.
New Zealand Wealth Management
named Responsible Investment Leader
in 2023 by Responsible Investment
Association of Australasia (RIAA).
Maintained A- Leadership rating
on the annual CDP (Carbon Disclosure
Project) benchmark, which is aligned
to the TCFD framework.
Maintain carbon neutrality across our
global operations for our 11th year
and a 54% reduction on scope 1 and 2
emissions from 2022.
Celebrated 30 years of the AMP
Foundation with $2m donated to
charities supporting women led
and First Nations businesses.
14
Business review
Group financial
performance
Profit and loss (A$m)
Revenue
AUM based revenue
Net interest income
Strategic partnerships 1
Other revenue 2
Total revenue
Variable costs
– Investment management expense
– Marketing and distribution
– Brokerage and commissions
– Loan impairment expense
– Other variable costs 3
Total variable costs
Gross profit
Controllable costs
– Employee costs
– Technology
– Regulatory, insurance and professional services
– Project costs
– Property costs
– Other operating expenses 4
Total controllable costs
EBIT
Interest expense 5
Investment income 6
Tax expense
NPAT (underlying) 8
– AMP Bank
– Platforms
– Master Trust
– Advice
– New Zealand Wealth Management
– Group 7
NPAT (underlying) by business unit
Items reported below NPAT
Discontinued operations 8
NPAT (statutory)
FY 23
2H 23
1H 23
FY 22
% FY
751
373
58
126
1,308
(143)
(27)
(82)
(7)
(61)
(320)
988
(334)
(165)
(82)
(72)
(62)
(29)
(744)
244
(61)
83
(70)
196
93
90
53
(47)
34
(27)
196
62
7
265
377
173
23
67
640
(69)
(16)
(41)
(4)
(31)
(161)
479
374
200
35
59
668
(74)
(11)
(41)
(3)
(30)
(159)
509
(170)
(164)
(84)
(47)
(33)
(31)
(17)
(81)
(35)
(39)
(31)
(12)
(382)
(362)
97
(29)
48
(32)
84
36
46
25
(22)
17
(18)
84
(82)
2
4
147
(32)
35
(38)
112
57
44
28
(25)
17
(9)
112
144
5
261
794
382
89
83
1,348
(165)
(20)
(80)
(3)
(78)
(346)
1,002
(330)
(143)
(88)
(119)
(43)
(34)
(757)
245
(62)
53
(52)
184
103
65
53
(68)
32
(1)
184
152
51
387
(5.4)
(2.4)
(34.8)
51.8
(3.0)
13.3
(35.0)
(2.5)
(133.3)
21.8
7.5
(1.4)
(1.2)
(15.4)
6.8
39.5
(44.2)
14.7
1.7
(0.4)
1.6
56.6
(34.6)
6.5
(9.7)
38.5
–
30.9
6.3
n/a
6.5
(59.2)
(86.3)
(31.5)
Earnings
EPS – underlying (cps) 1
EPS – actual (cps)
RoE – underlying
RoE – actual
Dividend 2
Dividend per share (cps)
Franking rate 3
Ordinary shares on issue (m) 1, 4
Weighted average number of shares on issue (m)
Share price for the period – closing ($)
Market capitalisation – end period ($m)
Capital and corporate debt
AMP shareholder equity ($m)
Corporate debt ($m)
Corporate gearing
Interest cover – underlying (times)
Interest cover – actual (times)
Margins
– basic 1
– fully diluted 1
– statutory
– low
– high
FY 23
2H 23
1H 23
FY 22
6.8
9.3
5.0%
6.7%
4.5
20%
2,741
2,862
2,904
2,860
0.84
1.37
2,549
3.0
0.1
4.3%
0.2%
2.0
20%
2,741
2,767
2,809
2,765
0.84
1.31
2,549
3,794
3,794
741
11%
5.0
6.4
741
11%
5.0
6.4
3.8
8.8
5.6%
13.0%
2.5
20%
2,799
2,958
3,006
2,956
0.95
1.37
3,162
3,929
1,078
17%
4.3
4.2
5.7
12.0
4.6%
9.7%
2.5
20%
3,043
3,215
3,266
3,213
0.87
1.40
4,002
4,077
1,078
16%
4.8
9.0
AMP Bank net interest margin (over average interest earning assets)
1.27%
1.15%
1.39%
1.38%
Platforms AUM based revenue to average AUM (bps)
Master Trust AUM based revenue to average AUM (bps)
New Zealand Wealth management AUM based revenue to average AUM (bps)
47
64
82
47
65
82
47
63
83
48
67
86
Volumes
AMP Bank total loans ($m)
Platforms net cashflows ($m) 5
Master Trust net cashflows ($m) 5
Platforms AUM ($m)
Master Trust AUM ($m)
New Zealand Wealth Management AUM ($m)
Total AUM ($b) 6
Controllable costs (pre-tax) and cost ratios
Controllable costs – excluding discontinued operations ($m)
Cost to income ratio – excluding discontinued operations
Staff numbers
Total staff numbers 7
Exchange rates
AUD/NZD – closing
AUD/NZD – average
24,441
24,441
24,537
24,033
1,401
(6,424)
71,060
51,865
10,853
660
(5,431)
741
(993)
2,532
(3,532)
71,060
68,322
65,495
51,865
55,427
54,023
10,853
10,789
10,459
133.8
133.8
134.5
130.0
744
69.0%
382
362
757
71.9%
66.2%
71.6%
2,664
2,664
2,976
3,000
1.0777
1.0802
1.0777
1.0815
1.0865
1.0797
1.0723
1.0930
Includes profit contributions from CLPC, CLAMP, PCCP and sponsor investments.
1
2 Includes Advice, North Guarantee and NZWM other revenues.
3 Includes payment of commissions, employed planner expenses and other variable selling costs.
4 Includes travel, marketing, printing, administration and other related costs.
5 Includes interest expense on corporate debt.
6 Includes investment income from Group cash.
7 Includes Strategic partnerships, Group costs not recovered from Business Units, investment income and interest expense on corporate debt.
8 Includes sold businesses of AMP Capital and SuperConcepts and revenues in relation to external mandates now discontinued, with FY 22
restated accordingly.
1 Number of shares has not been adjusted to remove treasury shares.
2 No ordinary dividends were declared for the 1H 22 period.
3 Franking rate is the franking applicable to the dividend for that year.
4 302,059,122 shares were repurchased and subsequently cancelled in FY 23 as part of the announced on-market share buyback.
5 Net cashflows exclude pension payments.
6 Excludes $1.8b of external discontinued AUM previously reported as WM Other AUM.
7 1H 23 FTE numbers impacted by the acquisition of enable.me.
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Business review
AMP Bank
$93m
Underlying NPAT
(FY 22: $103m)
FY 23 performance
Underlying NPAT of $93m (FY 22: $103m) reflects
the previously flagged compression in Net Interest
Margin (NIM), which was 1.27% for FY 23, compared
to 1.38% for FY 22. To respond to market conditions,
during 2H 23 AMP Bank’s strategy pivoted to lower
residential loan book growth given margin pressure
experienced in mortgages and deposits. Consequently
the residential mortgage book experienced subdued
growth of 1.7% for the year, 0.61x system.
Controllable costs for the year were 1.5% lower at $133m, with momentum behind
further cost reductions in FY 24. 90+ day arrears of 0.62% reflect the quality of the
loan book amid the challenging economic environment, compared to 0.70% for the
broader industry. AMP Bank remains well provisioned, and continues to provide
additional support to customers in hardship.
In November, AMP Bank announced a partnership with UK-based Engine
by Starling, to use its platform to bring a compelling digital bank offering
to the Australian small business market. This will open a new revenue stream
and diversify AMP Bank’s funding mix.
To improve return on capital, AMP Bank’s strategic focus is on disciplined
responses including nominal loan growth, diversifying and optimising funding
and reducing costs.
Winner of Money magazine’s
Best-Value Long Term Deposit
for the third year running
‘Best Digital Bank Pure Play
for Australia’ at The Digital
Banker’s Global Retail Banking
Innovation Awards
Platforms
FY 23 performance
Underlying NPAT of $90m, up 38.5% on FY 22 reflects
a positive North Guarantee experience from favourable
market conditions, benefitting from stabilising interest
rates and higher equity markets. Investment income was
also higher due to the interest rate environment.
$90m
Underlying NPAT
(FY 22: $65m)
Net cashflows (excluding pension payments) were $1.4bn (FY 22: $2.5bn), impacted by the shift
of non-super investment away from platforms, reflecting prevailing economic conditions. Flows
into AMP’s flagship platform North from independent financial advisers (IFAs) were up 33% on
the prior period, reflecting an ongoing focus on this market. Controllable costs increased to
$173m (FY 22: $158m), driven by investment in technology, product and distribution capability
to support future growth. North’s managed portfolio offers continue to grow, reaching $13bn
in assets under management by the end of 2023.
AMP’s leading retirement solution, MyNorth Lifetime, which launched in 2022, is a defined
contribution lifetime-income product that can be opened before and during retirement, and
provides high rates of income in retirement that never runs out. The product offers customers
and their financial advisers complete control over investment choice and strategy, with access
to North’s extensive investment menu. During 2023, MyNorth Lifetime was recognised globally
as the winner of the Pension Fund Design and Reform Award at the World Pension Summit held
in The Hague in the Netherlands. MyNorth Lifetime also received the Best Fund Innovation
Of The Year at the Chant West 2023 Super Fund Awards in May and Canstar’s Innovation
Excellence Award in April.
Zenith CW Pty Ltd ABN 20 639 121 403 AFSL 226872/AFS Rep No. 1280401 Chant West Awards issued May 2023 are solely statements of opinion
and not a recommendation in relation to making any investment decisions. Awards are current for 12 months and subject to change at any time.
Awards for previous years are for historical purposes only. Full details on Chant West Awards at https://www.chantwest.com.au/fund-awards/
about-the-awards/
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Business review
Advice
$47m loss
Underlying NPAT
(FY 22: $68m loss)
FY 23 performance
Underlying NPAT loss in Advice improved by $21m
to $47m, with continued progress in establishing Advice
as a sustainable, standalone business. An ongoing
focus on controllable costs resulted in a reduction
of 15.2% to $117m. Variable costs improved by
$16m to $2m, partly driven by the reshaping of the
equity portfolio.
The quality of AMP’s adviser network remained strong with average revenue per
advice practice above the industry average at $1.75m. Aligned adviser numbers
continued to stabilise during the year as adviser sentiment towards AMP continued
to improve with adviser satisfaction scores at 81%, up from 68% at FY 22. AMP
reached an agreement to settle the Buyer of Last Resort (BOLR) class action
in November 2023, with final court approval expected to occur in the first half
of 2024.
$53m
Underlying NPAT
(FY 22: $53m)
Master Trust
FY 23 performance
Underlying NPAT of $53m was in line with FY 22. Lower
AUM-based revenue (down 10.4%) was the result of
both the simplification program to consolidate products
and fees and the previously announced mandate loss
of $4.3bn. This was offset by disciplined cost control,
leading to a reduction in controllable costs of 10.8%
to $174m. Revenue margin of 64bps (FY 22: 67bps)
reflected the impact of the simplification initiatives
completed in May 2023.
Net cashflows were impacted by the above-mentioned mandate loss, which took effect
in August 2023. Excluding mandate losses, net cashflows improved $468m on FY 22.
Master Trust’s transformation program is well advanced, with initiatives identified
to deliver further member benefits in 2024. In January 2024, AMP announced the
appointment of a new default insurance provider for superannuation members, to
deliver more personalised insurance services and in line with members’ best
financial interests. The majority of superannuation members also benefited from
investment returns in excess of 11.5% for the 2023 calendar year.
AMP Super Fund won the Momentum award at Super Review’s 10th annual Super Fund
of the Year Awards for 2023. AMP Super took the prize in the Momentum category,
awarded to the fund that has made significant progress in completing key projects
which will enhance its strategic positioning in coming years.
New Zealand
FY 23 performance
Underlying NPAT of $34m was up 6.3% from $32m
at FY 22. Advice First’s revenue growth in FY 23
of $5.8m includes the strategic acquisition of enable.me
which delivers non AUM-based revenue through
fee-based coaching programs.
A focus on cost controls resulted in controllable costs of $36m, compared to $35m
in FY 22, despite inflationary pressures in this market. KiwiSaver, New Zealand’s
voluntary work-based retirement savings scheme, experienced a challenging 2H
23, reflecting the economic environment, delivering $70m in net cashflow.
The divestment of legacy products continued to simplify the business,
as advice and distribution revenue continues to grow.
$34m
Underlying NPAT
(FY 22: $32m)
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Material risks
Managing our
key risks
AMP’s approach to achieving its strategic objectives
is to take measured risks within our risk appetite.
AMP has a clear strategic plan to drive our business
forward and an Enterprise Risk Management
framework to identify, measure, control and
report risks.
Enterprise Risk Management framework
Effective risk management is fundamental
to understanding and responding to changes
in AMP’s operating environment, enabling us
to achieve our purpose and strategic objectives.
Risk management is a responsibility of all AMP
employees and is reflected in many of AMP’s
values – own it, be brave, do the right thing,
and put customers first.
AMP’s risk management framework provides the
foundation for how risks are managed across
AMP and enables AMP to meet its legislative
and regulatory requirements, codes and
ethical standards, as well as internal policies
and procedures. It includes the following
key components:
— Strategy and business plans covering
the whole of AMP
— Risk management strategy
— Risk appetite statement
— Supporting policies and practices
— Performance management
By establishing the principles, requirements,
roles and responsibilities for management
of risk across AMP, the framework ensures
all employees have clarity on how risks are
to be managed to fulfil the obligations to key
stakeholders, including customers, shareholders
and regulators.
Risk is also integrated into performance
management at AMP, and employees are
assessed twice-yearly on ‘respecting risk’.
The risk appetite statement articulates the level
of risk the board is willing to accept to ensure the
effective delivery of AMP’s strategic objectives.
There is clear alignment between AMP’s
corporate strategy and the risk appetite of the
AMP Limited Board, to ensure that decisions
made are consistent with the nature and level
of risk the board and management are willing
to accept.
Key business challenges
AMP is focused on delivering on its strategy, and in doing
so remains conscious of various challenges affecting the
financial services industry. These include, but are not
limited to, the following (listed in alphabetical order):
Business, employee and
business partner conduct
The conduct of financial institutions remains an area
of significant focus for the financial services industry
both globally and in Australia and New Zealand.
AMP devotes significant effort to ensure that our
business practices, management, staff or business
partner behaviours adequately meet the expectations
of regulators, customers and the broader community,
and do not result in an adverse impact on our
reputation and value proposition to customers.
Our Code of Conduct outlines how AMP seeks
to conduct its business and how it expects people
to conduct themselves. The principles that define
the high standards outline the behaviour and
decision-making practices, including how we treat
our employees, customers, business partners and
shareholders. We are committed to ensuring the right
culture is embedded in our everyday practices.
AMP embraces a safe and respectful work
environment that encourages our people
to report issues or concerns in the workplace.
Directors, employees (current and former),
contractors, service providers or any relative
or dependents of any of these people can
utilise AMP’s whistleblowing program to report
conduct or unethical behaviours.
Climate change
AMP, its customers and its external suppliers may
be adversely affected by physical and transition risks
associated with climate change. These effects may
directly impact AMP and its customers on a range
of physical, financial and legal risks to our business,
the investments we manage on behalf of our customers
and the wider community.
Initiatives to mitigate or respond to adverse impacts
of climate change may in turn impact market and asset
prices, economic activity, and customer behaviour,
particularly in geographic locations and industry
sectors adversely affected by these changes.
AMP’s approach to managing climate-related
risks and opportunities is detailed in AMP’s
annual Sustainability report, informed by key
pillars of the Taskforce on Climate-related
Financial Disclosures (TCFD) framework.
In 2023, AMP retained an A- Leadership rating
(second highest rating available) in the annual
CDP investor disclosure program, indicating
leadership in our management of climate
related risks and opportunities. AMP has been
carbon neutral across its operations since
2013 to address the direct impacts of our
business activities.
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Material Risks
Competitor
and customer
environment
The financial services industry, as
well as the community in Australia
and New Zealand more broadly,
have faced various challenges
throughout 2023, including natural
disasters, economic uncertainty,
and rising interest rates. Throughout
the year AMP supported customers
in a number of ways, including
strengthening protection for bank
customers at risk of financial abuse
and experiencing vulnerability, and
reducing interest rates across fixed
term home loans in May 2023.
Customer expectations are
evolving which is intensifying
competition within banking and
wealth management. Furthermore,
as economic uncertainty prevails,
it is affecting the performance
of assets under management
across the industry. AMP continues
to adapt its capabilities and
operating model in order
to remain competitive and
relevant to customers.
In 2023, AMP continued
to deliver on its strategy
to reposition AMP as a simpler,
purpose-led, customer-focused
business in its core markets
of banking and wealth
management. Notable
strategic developments
included completion of the
sale of the AMP Capital
real estate and domestic
infrastructure equity business
to Dexus Funds Management,
the announcement of a new
digital bank designed for
small business and AMP’s
first-to market retirement
solution recognised globally
as winner of the Pension Fund
Design and Reform Award
at the World Pension Summit.
Cyber security threats,
fraud and scam threats
Operational risk
environment
Organisational
change
Regulatory
environment
Operational risk exposures for
AMP relate to losses resulting
from inadequate or failed internal
processes, people and systems or
from external events. These include,
but are not limited to, information
technology, human resources,
internal and external fraud and
scams, money laundering and
counter-terrorism financing, bribery
and corruption. This environment
will be further stressed by the other
key business challenges included
in this section.
Employee retention and key
person risk are key operational
risks for AMP, and these are
currently elevated across
financial services as a whole
due to low unemployment
and a competitive talent
market. We are committed
to mitigating operational
risk by reducing operational
complexity and strengthening
risk management, internal
controls and governance.
We continue reshaping
the adviser network and
simplifying superannuation
products and investment
options, and our
corporate structure.
The AMP operational
risk profile reflects these
exposures and the financial
statements of AMP
contain certain provisions
and contingent liability
disclosures for these risks
in accordance with applicable
accounting standards.
Cyber risk, as well as fraud and scams,
remain a threat in a rapidly changing
technological and digital environment.
AMP is committed to continually uplifting
its response to these risks. We are
uplifting cyber resilience through
preventing, detecting, and responding
to cyber incidents. We also continually
monitor potential fraud and scams in
order to identify and address them as
early as possible.
AMP’s Cyber Defence Centre uses
industry best practices, advanced
technologies and intelligence sharing
arrangements with Australian
Government and industry entities
to uplift AMP’s cyber defences,
enhance situational awareness and
mitigate malicious threats. The AMP
Cyber Team recognises that the
education and awareness of
employees is critical to maintaining
the security of customer data, and
conducted ~40 educational seminars
for employees on cyber security
awareness, threats and responses.
The Cyber Team broadened its reach
to include financial advisers, with
a dedicated cyber policy, improved
training materials, and awareness
campaigns. While AMP continues to
demonstrate maturity uplifts against
the National Institute of Standards
and Technology (NIST) Cyber
Security Framework and improve
its overall control effectiveness,
cyber security threats remain a key
risk given the evolving nature of
the threat. AMP Bank, aligned to
the Australian Bankers Association
Scam-Safe Accord, has committed
to a range of anti scam measures to
help protect our customers and the
broader community from scammers.
AMP Bank will introduce higher
protections into our systems based
on the principles of disrupt, detect
and respond.
Changes were made throughout
the year to continue to simplify the
operating model of the business.
There is always a risk that
business momentum is lost
while organisational change
is implemented. There is a risk
that the extended period of
change may have an adverse
impact on employees causing
a strain to deliver on our strategy
and transformation initiatives.
These risks will be mitigated
by maintaining leadership
and performance focus on
the business.
AMP continues to invest
in adopting new ways of
working to drive efficiency
and improve its practices
to increase accountability
and build on core strengths.
We recognise that failure
to execute appropriately
on the implementation
of these changes can
increase the risks of
disruption to AMP’s
business operations.
AMP operates in Australia and New
Zealand, with their own legislative
and regulatory requirements. AMP
continues to anticipate upcoming
changes to these requirements.
AMP continues to respond
and adjust its business
processes for any changes.
However, failure to adequately
anticipate and respond to
future regulatory changes
could have a material adverse
impact on the performance
of its businesses and achieving
its strategic objectives. AMP
is committed to continually
strengthening its risk
management practices, its
control environment and
enhancing its compliance
systems across its businesses.
AMP’s internal policies,
frameworks and procedures
seek to ensure any changes
in our regulatory obligations
are complied with. Compliance,
legal and regulatory risk
that results in breaches is
reported to AMP management
committees and regulators.
This is managed in accordance
with internal policies.
Regulatory consultations and
interactions are reported and
monitored as part of AMP’s
internal risk and compliance
reporting process. AMP
actively participates in these
interactions and cooperates
with all regulators to resolve
such matters.
More information about
our approach to these
challenges can be
found on our website at:
corporate.amp.com.au/
about-amp/corporate-
sustainability.
Significant changes
to the state of affairs
Apart from as elsewhere
disclosed in this report, there
were no other significant
changes in the state of
affairs during the year.
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Governance
Our approach
to governance
The board oversees AMP as it continues to deliver on its
strategy, building on its 175-year heritage. This strategy
enables AMP to deliver on its purpose, helping people create
their tomorrow. As the board oversees AMP’s progress against
its strategy, the board’s commitment to governance was
demonstrated in a number of key areas in 2023:
Succession planning & board renewal
Culture, conduct & ethical behaviour
The AMP board engaged an external advisor to assist with
its board succession planning. This involved refreshing the
skills matrix to align to future strategy and supported the
appointment of two new non-executive directors, Kathleen
Bailey-Lord and Anna Leibel effective 1 January 2024.
AMP’s code of conduct was refreshed in 2023 in line
with AMP’s purpose and values. AMP launched new
performance and recognition programs to drive
accountability, and positively encourage employees
to promote and work in alignment with AMP’s values.
Advisory Groups
Risk culture
In October 2022, AMP’s board established two advisory
groups to support and promote two of AMP’s key
strategic enablers, ESG and sustainability, and Technology
transformation. These board advisory groups conducted
workshops and deep dives with management throughout
the year on these topics. Following the satisfaction of core
objectives, the advisory groups were dissolved in mid-2023.
ESG, sustainability and technology transformation
will continue to be overseen by AMP’s board and
its committees.
AMP continues to focus on maintaining an appropriate risk
culture, aligned to AMP’s purpose and values. Risk culture
is measured biannually, with results provided to the board,
and focus areas identified with clear action plans. AMP
continues to engage with all employees on risk culture via
an internal Speak Up survey, providing employees with
opportunities to share their experiences of risk culture
and provide valuable feedback.
→ To read more about AMP’s approach to corporate
governance, please see the 2023 Corporate
governance statement
AMP’s governance framework provides clear separation of the board’s
oversight functions from the executive responsibilities and accountability of
the CEO and AMP’s leadership team. This framework is supported by AMP’s
constitution, internal policies, charters, standards and procedures which
facilitate this separation of responsibilities. An overview of AMP’s corporate
governance framework is depicted below.
Accountable to Shareholders
AMP Limited Board of Directors
(Including Chief Executive Officer)
Oversees management of AMP
for shareholders and approves
the strategic plan
Delegated Authority
Accountable to Board
AMP Limited Board Committees
Audit Committee
Oversees financial reporting and
internal and external audit functions
Nomination Committee
Oversees board and
committee membership
and succession planning
Remuneration Committee
Oversees key remuneration
and people policies and practices
Risk and Compliance
Committee
Oversees current and
future risk management
AMP Limited Shareholders
Delegated Authority
Accountable to Board
Chief Executive Officer
Responsible for the day-to-day
management of the AMP group
and the implementation of our
strategic objectives
Company
Secretary
Responsible
for the proper
functioning of
the board
AMP Limited Executive Committee
Responsible, with the CEO, for
executing AMP’s strategic objectives
and managing and conducting the
AMP group’s operations
AMP Limited Employees
AMP Limited Constitution, Charters, Policies and Standards
AMP’s purpose and values
From time to time, additional board committees, working or advisory groups are established, or a board member is appointed
as the board’s representative on management steering committees. In 2023, this included two advisory groups, an ESG
(environmental, social and governance) & sustainability advisory group and a Technology transformation advisory group,
to enhance the board’s insight into these key strategic enablers.
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Board of directors
Debra was appointed to the AMP Limited Board as a Non-executive director in June 2019
and as the Chair in August 2020. She was also appointed as the Chair of the Nomination
Committee in August 2020 and is a member of the Remuneration Committee. Debra is also
the Chair of the AMP Bank Board.
Experience
Debra brings significant experience from more than 30 years in global financial services,
including as the local Chief Executive of Mizuho Bank in Australia and Commonwealth Bank
in Japan. She has expertise across financial markets, institutional banking, risk management,
treasury, human resource management and global corporate culture transformation. Debra
is currently Chair of Export Finance Australia and a Non-executive director on the boards
of Australia Post, Treasury Corporation of Victoria, Persol Holdings Co. Ltd (Tokyo Stock
Exchange) and Vice President of the Australia-Japan Business Cooperation Committee.
Her previous board experience includes Australia-Japan Foundation, Australian Financial
Markets Association, Asia Society and Women in Banking and Finance. She has graduate
and post-graduate degrees in economics and finance, as well as philosophy and Japanese
language and literature.
Directorships of other ASX listed companies
— None
Directorships of other companies
— Non-executive director, Persol Holdings Co., Ltd (Tokyo Stock Exchange)
(appointed July 2023)
Government and community involvement
— Chair and Non-executive director, Export Finance Australia
(appointed December 2023, effective February 2024)
— Non-executive director, Australia Post (appointed October 2023)
— Non-executive director, Treasury Corporation of Victoria (appointed August 2018)
— Member and Vice President, Australia-Japan Business Cooperation Committee
(appointed November 2020 and appointed as Vice President October 2021)
— Member, Chief Executive Women Australia (appointed January 2020)
Alexis George was appointed Chief Executive Officer (CEO) of AMP Limited in August 2021.
She is responsible for leading the AMP business. In addition, Alexis was appointed to the
AMP Limited Board and AMP Bank Board in August 2021.
Experience
Alexis has more than 30 years’ experience in the financial services industry in Australia
and overseas. She spent seven years at ANZ, including most recently as the Deputy Chief
Executive Officer, working with the CEO to drive group-wide strategic initiatives in addition
to having responsibility for its shared service centres and banking services. As the Group
Executive Wealth Australia, Alexis led ANZ’s ~$4 billion wealth divestment program, including
the separation and sale of its life insurance and superannuation businesses to Zurich and
IOOF. Prior to ANZ, Alexis spent 10 years with ING Group in a number of senior roles, including
CEO Czech Republic and Slovakia, responsible for banking, insurance and funds management,
and Regional COO Asia, responsible for product, marketing, technology and operations.
Directorships of other ASX listed companies
— None
Government and community involvement
— Member, Chief Executive Women Australia (appointed October 2016)
— Member, Financial Services Council Board (appointed September 2023)
— Member, Australian Bankers Association Council (appointed August 2021)
Debra
Hazelton
BA (Hons), MCom,
GAICD
Independent Chair
Alexis
George
BCom, FCA, GAICD
Chief Executive
Officer
Andrew was appointed to the AMP Limited Board as a Non-executive director in July 2022
and is a member of the Nomination, Remuneration and Risk and Compliance Committees.
At the same time, Andrew was appointed to the AMP Bank Board and is a member of its Risk
and Compliance Committee.
Experience
Andrew is a senior financial services executive with over 30 years’ international and domestic
experience across banking and financial markets in Australia, London, Hong Kong and
Singapore, with a particular focus on capital markets and mergers and acquisitions. From
1989 to 2020, Andrew worked with J.P. Morgan Chase & Co holding various roles over his
three-decade career with the company, including most recently as Head of Investment
Banking for Australia and New Zealand from 2017 to 2020. Prior to that role, Andrew was
Head of the Financial Institutions investment banking business for Australia and New Zealand
from 2004. Andrew is a member of the Ord Minnett Private Opportunities Fund Investment
Committee, a panel member for Adara Group, which provides independent pro bono advice
to Australian companies as well as being an executive coach with Foresight Global Coaching.
Directorships of other ASX listed companies
— None
Government and community involvement
— Member, National Heart Foundation Advisory Board (appointed April 2020)
Rahoul was appointed to the AMP Limited Board as a Non-executive director in January 2020.
He served as Chair of the Risk Committee from May 2020 to October 2022. He was appointed
the Chair of the Audit Committee in October 2022 and is a member of the Nomination and Risk
and Compliance Committees. At the same time, Rahoul was appointed to the AMP Bank Board
and is Chair of its Audit Committee and a member of its Risk and Compliance Committee.
Experience
Rahoul has over 40 years’ experience in professional services, advising complex multinational
organisations in Australia and overseas. Rahoul is a member of the Audit and Risk Committee of
Minter Ellison’s Partnership Board. Between 2018 and 2021, he was Partner and National Leader
of Minter Ellison’s financial services practice in Australia and leader of the risk consulting practice.
Prior to this, Rahoul was a Senior Partner in PwC Australia and subsequently Canada, serving for
a total of almost 30 years. During this time, he held a number of leadership roles, delivering audit,
assurance and risk consulting services to major financial institutions in Australia, Canada and the
United Kingdom. Rahoul is also a member of the Advisory Committee for Genpact Australia Pty Ltd.
Directorships of other ASX listed companies
— None
Government and community involvement
— Member, Reserve Bank of Australia, Audit Committee (appointed February 2018)
— Member, Loreto Kirribilli, Finance and Risk Committee (appointed February 2024)
Michael was appointed to the AMP Limited Board as a Non-executive director in March
2020. He was appointed as the Chair of the Remuneration Committee in August 2020 and
is a member of the Audit and Nomination Committees. At the same time, Michael was also
appointed to the AMP Bank Board and is a member of its Audit Committee.
Experience
Michael has over 35 years of professional experience, with significant experience in senior
executive financial and commercial roles. His experience as Chief Financial Officer spans
over 20 years in ASX Listed companies as well as the public sector. Michael is also Chair
of Sigma Healthcare and has served on numerous private boards since 2010.
Directorships of other ASX listed companies
— Non-executive director and Chair, Sigma Healthcare Limited
(appointed February 2020 and Chair in August 2022)
Directorships of other companies
— Non-executive director of GMHBA Limited (appointed October 2023)
Andrew Best
BLaws, BSc, MAICD
Independent,
Non-executive
director
Rahoul
Chowdry
BCom, FCA
Independent,
Non-executive
director
Michael
Sammells
BBus, FCPA, GAICD
Independent,
Non-executive
director
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Board of directors
Mike Hirst
BCom, SFFin,
MAICD
Independent,
Non-executive
director
Andrea
Slattery
BAcc, MCom,
FCPA, FCA, FSSA,
FAICD, GCB.D(ESG)
Independent,
Non-executive
director
Mike was appointed to the AMP Limited Board as a Non-executive director in July 2021.
He was appointed the Chair of the Risk and Compliance Committee in October 2022 and
is a member of the Nomination and Remuneration Committees. At the same time, Mike was
appointed to the AMP Bank Board and is Chair of its Risk and Compliance Committee.
Experience
Mike has more than 40 years of experience in board and senior executive leadership
roles within retail banking, treasury, funds management and financial markets. Mike
was the Managing Director of Bendigo and Adelaide Bank from 2009 to 2018 and prior
to this, he worked in senior executive and management positions with Colonial Limited,
Westpac Banking Corporation and Chase AMP Bank. Mike served as Deputy Chair of the
Treasury Corporation of Victoria and previously held non-executive directorships with
Austraclear Limited, Colonial First State, Rural Bank and Barwon Health Limited. Mike was
a Commissioner on the Federal Government’s National COVID-19 Commission Advisory
Board, a member of the Federal Government’s Financial Sector Advisory Council and was
Deputy Chair of the Australian Banking Association.
Directorships of other ASX listed companies
— Non-executive director, AMCIL Limited (appointed January 2019)
— Non-executive director, Butn Limited (appointed September 2020)
Directorships of other companies
— Non-executive director of GMHBA Limited (appointed July 2018)
— Non- executive director of Adelaide Airport Limited (appointed September 2023)
Government and community involvement
— Acting Chair, Racing Victoria (appointed as a director in 2015, Deputy Chair in October
2016 and Acting Chair October 2016–October 2017 and from July 2023)
— Honorary Member, Business Council of Australia (appointed July 2018)
Andrea was appointed to the AMP Limited Board as a Non-executive director in February
2019 and is a member of the Audit, Nomination and Risk and Compliance Committees.
At the same time, she was appointed to the AMP Bank Board and is a member of its Audit
and Risk and Compliance Committees. In addition, Andrea was also appointed to the AMP
Foundation Board in March 2022.
Experience
As a Non-executive director, Andrea has substantial experience on global, public and
private companies and government advisory committees in the finance, clean energy,
infrastructure, superannuation, professional services and defence industries, spanning
more than 30 years.
As an executive, Andrea was the co-founder, managing director and CEO of the SMSF
Association from 2003 to 2017. Prior to this, Andrea was a financial adviser and Principal
of her own tax consulting and advisory business. Andrea’s previous Government Advisory
Committee appointments include the Federal Government’s Innovation Investment
Partnership, Industry Working Group, Stronger Super Peak Consultative Group,
Superannuation Advisory Group and the Future of Financial Advice.
Directorships of other ASX listed companies
— Non-executive director, Argo Global Listed Infrastructure (April 2015 – June 2022)
Directorships of other companies
— Non-executive director, Infrabuild Ltd (appointed December 2022)
Government and community involvement
— Non-executive director, Clean Energy Finance Corporation (appointed February 2018)
— Deputy Chair, Woomera Prohibited Area Advisory Board (appointed July 2019)
— Member, Chief Executive Women Australia (appointed January 2017)
— Member, Global Competent Boards (appointed November 2021)
Kathleen
Bailey-Lord
BA(Hons), FAICD
Independent,
Non-executive
director
Anna Leibel
LLM (EntGov),
GDipITLdshp,
GAICD
Independent,
Non-executive
director
Kathleen was appointed to the AMP Limited Board as a non-executive director in January
2024 and is a member of the Nomination and Remuneration Committees. At the same time,
Kathleen was appointed to the AMP Bank Board.
Experience
Kathleen has over 25 years’ experience in board and senior executive leadership roles
across diverse industry sectors including financial services, technology, utilities and
education. Kathleen was the Group General Manager, Global Shared Services of Australia
and New Zealand Banking Group (ANZ) from 2008–2013 and prior to this she was the Chief
Executive Officer of The Fordham Group and held senior executive management positions
with PMP Ltd, Phillips Fox Lawyers (now DLA Piper) and IBM Australia and New Zealand.
Directorships of other ASX listed companies
— Non-executive director and Chair, Janison Education Group Limited (appointed
February 2022 and as Chair, October 2023)
— Non-executive director, Bank of Queensland (May 2019–August 2021)
Directorships of other companies
— Non-executive director, Datacom Group Limited (appointed April 2022)
— Non-executive director, Alinta Energy (appointed May 2021)
Government and community involvement
— Non-executive director, St Vincent’s Health Australia Limited (appointed April 2023)
— Australian Institute of Company Directors, Victorian Councillor (appointed 2017) and
Victorian President (elected 2024), Member of Technology Governance & Innovation
Advisory Panel (appointed 2018)
— Member, Chief Executive Women (appointed January 2009)
Anna was appointed to the AMP Limited Board as a non-executive director in January 2024
and is a member of the Nomination and Risk and Compliance Committees. At the same time,
Anna was appointed to the AMP Bank Board and its Risk and Compliance Committee.
Experience
Anna’s experience spans private and public boards and senior executive leadership
positions across a wide spectrum of highly regulated and asset-intensive service sectors
such as financial services, telecommunications, infrastructure and healthcare. Anna was the
Chief Delivery and Information Officer (2019–2021) and Chief Information Officer (2017–2019)
at UniSuper and has also held senior executive roles with PwC and Telstra.
Directorships of other ASX listed companies
— None
Directorships of other companies
— Non-executive director, Secure Electronic Registries Victoria (SERV)
(appointed September 2021)
Government and community involvement
— Non-executive director, Alfred Health (appointed July 2021)
Kate McKenzie BA, LLB, MAICD
Former Independent, Non-executive director
Kate served as an independent non-executive director of AMP Limited and AMP Bank
Limited from November 2020 until her retirement in December 2023. Kate was also
a member of the AMP Limited Nomination Committee for 2023 and Remuneration
Committee (July–August 2023).
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Group Executive
Committee
Alexis George was appointed Chief Executive Officer (CEO) of AMP Limited in August 2021.
She is responsible for leading the AMP business. In addition, Alexis was appointed to the
AMP Limited Board and AMP Bank Board in August 2021.
Experience
Alexis has more than 30 years’ experience in the financial services industry in Australia and
overseas. She spent seven years at ANZ, including most recently as the Deputy Chief Executive
Officer, working with the CEO to drive group-wide strategic initiatives in addition to having
responsibility for its shared service centres and banking services.
As the Group Executive Wealth Australia, Alexis led ANZ’s ~$4 billion wealth divestment program,
including the separation and sale of its life insurance and superannuation businesses to Zurich and
IOOF. Prior to ANZ, Alexis spent ten years with ING Group in a number of senior roles including
CEO Czech Republic and Slovakia, responsible for banking, insurance and funds management,
and Regional COO Asia, responsible for product, marketing, technology and operations.
Alexis is a member of the Institute of Chartered Accountants and a graduate of the Australian
Institute of Company Directors. Alexis is an active member of Chief Executive Women and
is a passionate advocate for women in leadership roles. She is a member of the Financial
Services Council Board and the Australian Bankers Association Council.
Blair joined AMP in 2009 and took up the role of Chief Financial Officer in July 2023.
Experience
Blair was previously CEO/Managing Director of New Zealand Wealth Management from
January 2017, and prior to this served as AMP’s Director Retail Financial Services; Director
of Advice & Sales and General Manager Marketing and Distribution. Blair has over 30 years’
experience across the financial services sector in New Zealand and Australia.
From August 2020 to January 2021, Blair also served as Acting CEO for AMP Australia,
where he was responsible for AMP’s wealth management and banking divisions with
a focus on strengthening client-led outcomes.
David joined AMP in September 2004 and was appointed Group General Counsel in May 2018.
David has group-wide responsibility for AMP’s legal and governance functions.
Experience
David has over 30 years’ experience in the legal profession, with extensive experience in the
areas of M&A, corporate law and corporate governance, having worked in law firms in Perth
and Sydney and with the ASX. Prior to his appointment as Group General Counsel, David
was the Group Company Secretary and General Counsel, Governance at AMP, which included
acting as Company Secretary for AMP Limited.
David holds a Bachelor of Commerce and Bachelor of Laws from the University of WA and a Master
of Laws from the University of Sydney. He is a Fellow of the Governance Institute of Australia.
Alexis
George
BCom, FCA, GAICD
Chief Executive
Officer
Blair Vernon
BBS
Chief Financial
Officer
David Cullen
BCom, LLB, LLM
Group General
Counsel
Rebecca was appointed the Chief People Officer in November 2021 and is responsible for
leading human capital strategy, employee experience, talent and succession, leadership,
performance, remuneration, recruitment, diversity and inclusion, cultural transformation
and employee development. Rebecca is also accountable for corporate communications
and sustainability. Rebecca joined AMP in April 2020 as Group Director People.
Experience
Rebecca Nash
BBus, GAICD, GradCert
Chief People,
Sustainability and
Community Officer
Rebecca has more than 25 years of local and global multi-sector experience. Prior
to joining AMP, she spent seven years at Perpetual as the Group Executive, People
& Culture, where her portfolio included sustainability and business transformation.
During her time at Perpetual, Rebecca served as a Director of Perpetual Trustee
Company. Prior to Perpetual, Rebecca held senior roles with National Australia Bank
and Accenture. Rebecca is a graduate of the Australian Institute of Company Directors,
Stanford Business School and Harvard Business School’s Women on Boards program
(2018). She holds a Bachelor of Business degree from the University of Technology,
Sydney, and a change management qualification from the Australian Graduate School
of Management at the University of New South Wales, Sydney.
Sean O’Malley was appointed the Group Executive of AMP Bank in September 2021.
He is responsible for the management and growth of AMP Bank, and for Marketing
across the group.
Experience
Sean joined AMP in May 2013 and has over 25 years of experience in delivering enhanced
business results, predominately in financial services industries. He has deep and broad
leadership experience, having performed multiple roles across the AMP business, including
as Director of AMP Contact Centres and Operations Transformation with a focus on
transforming the customer experience, and Director of AMP Direct, where he designed the
organisational structure and operating model of AMP’s direct-to-client advice model. Sean
joined the bank as Director of Technology and Operations in 2016, focused on leading
capability and technology enhancements, and the Future AMP Bank Core Program. In April
2021, Sean was appointed to Managing Director AMP Bank. Sean is responsible for leading
the bank, delivering its future growth strategy, uplifting its digital capability and ensuring
the ongoing delivery of high-quality products and services to customers.
Nicola joined AMP in August 2019 as Head of Internal Audit and became Chief Audit
Executive in February 2020. She was appointed Acting Chief Risk Officer in February
2022 and Chief Risk Officer in May 2022, leading AMP’s Risk Management function
across the group.
Experience
Nicola has more than 25 years of experience in financial services, both domestically
and internationally, during which time she has built a deep understanding of
regulation, risk, governance and control. Nicola has held various roles in financial
services organisations and regulators, including most recently with ANZ as General
Manager of Audit for the Wealth business, and at Barclays, HBOS and the Financial
Services Authority in the UK. Nicola is also a past President of the Chartered Institute
of Internal Audit in the UK and a former board member of the Global Institute
of Internal Audit.
Nicola holds a Bachelor of Arts (Honours) from Middlesex University and a Masters
in Audit Management and Consultancy from the University of Central England.
Sean O’Malley
MBA, BCom, FIML
Group Executive,
AMP Bank
Nicola Rimmer-
Hollyman
BA (Hons), MSc,
CMIIA, QAIP
Chief Risk Officer
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Group Executive Committee
Edwina was appointed Group Executive Platforms in July 2023. The Platforms business provides
superannuation, retirement and investment solutions to advisers and their clients.
Experience
Edwina is a seasoned executive, board director, consultant, and transformational leader having
held senior executive roles across wealth management; superannuation and funds management
businesses. In June 2021, Edwina was appointed Director, Platforms at AMP, with end-to-end
accountability for AMP’s Wealth Superannuation Fund, Wrap Platforms and SuperConcepts
SMSF business (which was sold on 30 June 2023).
Previously, Edwina led AMP Capital’s Global Product function, responsible for its Managed
Investment Schemes, offshore domiciled funds and separate accounts. Before AMP, Edwina
held various senior leadership roles at Perpetual Investments responsible for strategy; business
development; product innovation and management functions. She was also a management
consultant with Accenture specialising in wealth management and began her career as a lawyer
with DLA Piper (then Phillips Fox).
Edwina holds a Bachelor of Laws (QUT) and a Graduate Diploma in Applied Finance & Investment
(FINSIA). She is a Director of ASFA.
Edwina
Maloney
LLB, GradDip Applied
Finance & Investment
(FINSIA)
Group Executive,
Platforms
Matt was appointed Group Executive Advice in July 2023, and is responsible for leading
AMP’s Advice business, which provides professional services to a network of aligned and
independent financial advisers.
Experience
Matt is a highly experienced leader in financial services having held senior executive
roles across financial advice, wealth management, superannuation, investments,
mortgages and banking. Matt joined AMP in July 2021 to lead and transform AMP’s
advice business.
Matt has extensive experience in large scale advice transformations and a deep
knowledge of building and operating successful advice businesses. He has led advice
and mortgage broking businesses at MLC/NAB, was CEO of Yellow Brick Road, an ASX
listed business, and Executive Director at Loan Market and Wealth Market, both privately
owned businesses.
Matt holds a Diploma in Financial Planning from RMIT University and a Diploma in Applied
Finance and Investment from FINSIA.
Matt Lawler
DipFinPlan, Dip
Applied Finance and
Investment (FINSIA)
Group Executive,
Advice
Melinda was appointed Group Executive Superannuation and Investments in January
2024, joining from KPMG where she led the Actuarial and Data Analytics team. She leads
AMP’s Investment business and the Superannuation (Master Trust) business which serves
personal and corporate super members.
Experience
Melinda has deep expertise in superannuation with more than 30 years in the industry.
She also has experience in wealth management, life insurance, general insurance and
not for profit organisations, including as CEO of the Actuaries Institute and Policy
Director at ASFA.
Having spent eleven years at BT Financial Group in the 1990–2000’s, Melinda was
Managing Director, Superannuation for seven years from 2014 where she led the
transformation and simplification of BT’s complex heritage superannuation business
to a modern digital enterprise, migrating $31bn and 560,000 members from multiple
products to the go-forward offer.
Melinda is an actuary and is a Fellow of the Institute of Actuaries of Australia. She has
executive and non-executive director experience and is a graduate of the Australian
Institute of Company Directors. She has been an active member of ASFA and the FSC
over many years, including serving on ASFA’s board and the FSC superannuation
board committee.
Kavita was appointed Chief Technology Officer in January 2024, and is responsible
for leading the group’s technology strategy to ensure a digital first approach aligned
to AMP’s strategy of a simplified, customer-centric business.
Experience
Kavita is an accomplished technology leader with expertise in driving transformational
change to deliver strategic and commercial objectives. Kavita has more than
20 years’ experience across a variety of technology roles specialising in financial
services, including superannuation, investments, digital, data, cloud, lending, and
corporate technology.
Prior to AMP Kavita was at AustralianSuper, where she held the roles of co-acting CTO
and Head of Enterprise Technology. At AustralianSuper she established and transformed
technology capabilities across investments, member experience, cloud infrastructure,
employee experience, data, and enterprise technology assets. Prior to this, Kavita held
various senior positions over 14 years at ANZ, including leadership roles within Home
and Business Lending technology.
Melinda Howes
BEc, FIAA, GAICD
Group Executive,
Superannuation
and Investments
Kavita Mistry
BSc, MIMS
Chief Technology
Officer
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Directors’ report
for the year ended 31 December 2023
About the Directors’ report
This directors’ report provides information on the structure and progress of our business, our 2023 financial
performance and our strategies and prospects for the future. It covers AMP Limited and the entities it controlled
during the year ended 31 December 2023. In addition to the information contained in this section, the following
information also forms part of the directors’ report:
—
—
Information on directors (pages 26–29)
Managing key risks (pages 20–23)
All figures are in Australian dollars ($) unless otherwise stated.
Operating and financial review
Principal activities
AMP Group provides banking, superannuation, retirement and financial advice services in Australia and New Zealand.
For the purposes of this report, our business is divided into five operating business units: AMP Bank, Platforms, Master Trust,
Advice and New Zealand Wealth Management.
AMP Bank offers residential mortgages, business financing, deposits and transactional banking services. The Bank continues
to focus on growth through its digital channels, improving the experience for both customers and intermediaries. AMP Bank
has helped around 191,000 customers with their banking needs and during 2023 provided over 9,000 customers with new
home loans.
AMP’s Platforms business is a leading provider of superannuation, retirement and investment solutions, enabling advisers
and their clients to build a personalised investment portfolio on AMP’s flagship North platform.
AMP’s Master Trust, SignatureSuper, is one of the largest retail Master Trusts in Australia, providing superannuation and
pension solutions to individuals and through workplace super.
Advice provides professional services to a network of aligned and Independent Financial Advisers (IFAs). These advisers
provide financial advice and wealth solutions to their clients, including retirement planning, investments and financing.
In addition to supporting this network of advisers, the Advice business partners with a number of advice practices via equity
ownership to support their growth.
New Zealand Wealth Management provides clients with a variety of wealth management solutions including KiwiSaver,
corporate superannuation, retail investments and general insurance. It also operates a wholly owned distribution business
operating under the AdviceFirst and enable.me brands.
In addition to these operating business units, AMP also holds several strategic partnerships and other retained interests including:
— 19.99% of China Life Pension Company (CLPC),
— 14.97% of China Life AMP Asset Management Company Ltd (CLAMP), and
— 23.27% in US real estate investment manager, Pacific Coast Capital Partners LLC (PCCP).
Completion of Sale of AMP Capital
Domestic real estate and infrastructure equity business
Further to AMP’s announcement of the first stage completion of the sale and transfer of the AMP Capital real estate and
domestic infrastructure equity business to Dexus Funds Management Ltd (Dexus) in March 2023, AMP confirmed final
completion of the transaction occurred on 30 November 2023 and AMP received the remaining $50m of the $225m base
purchase price.
International infrastructure equity business
On 3 February 2023, AMP announced the completion of the sale and transfer of AMP Capital’s international infrastructure
equity business to DigitalBridge Group, Inc. (DigitalBridge). The total consideration received was $520m.
The completion of the sale of the domestic real estate and domestic and international infrastructure equity businesses supports
the delivery of AMP’s strategic objective to simplify its portfolio and focus on its core businesses in Australia and New Zealand.
Settlement of Shareholder class action and Financial adviser class action
Shareholder class action
AMP Limited has been subject to a Shareholder Class Action since 2018 relating to alleged breaches of continuous disclosure
obligations. On 21 August 2023, AMP announced that an in-principle agreement had been reached to settle the shareholder
class action, without admission of liability, for a total sum of $110m (inclusive of interest and costs), of which a majority of the
settlement amount would be met by available insurance proceeds. On 14 November 2023, the settlement was approved by the
Supreme Court of New South Wales and an amount of approximately $74m was subsequently recovered from AMP’s insurers,
resulting in a net exposure of approximately $36m for AMP. The receipt of the insurance proceeds and settlement payment
to the lawyers for the plaintiffs were fully completed in January 2024.
Financial adviser class action
On 23 November 2023, AMP announced that an agreement had been reached to settle the class action brought on behalf
of certain advice practices authorised by AMP Financial Planning Pty Limited as of 8 August 2019. The settlement is for a total
sum of $100m, inclusive of costs and interest, without admission of liability, and subject to the finalisation and execution of a deed
of settlement and approval by the Federal Court of Australia (the Court). The settlement covers the class action in its entirety,
including for those parts of the proceeding about which there has been no judgment. Approval by the Court is expected in 1H 24.
Review of operations and results
The profit attributable to the shareholders of AMP Limited for the full year ended 31 December 2023 was $265m (FY22: $387m).
Profit for the group and key performance metrics were as follows:
Profit ($m)
AMP Bank
Platforms
Master Trust
Advice
New Zealand Wealth Management
Group 1
NPAT (underlying)
Items reported below NPAT 2
Discontinued operations 3
NPAT (statutory)
FY23
93
90
53
(47)
34
(27)
196
62
7
265
FY22
103
65
53
(68)
32
(1)
184
152
51
387
%FY
(9.7)
38.5
–
30.9
6.3
n/a
6.5
(59.2)
(86.3)
(31.5)
— FY23 NPAT (underlying) of $196m was $12m higher than FY22 (FY22: $184m). This reflects improved Platforms earnings
(38.5%), improved New Zealand Wealth Management earnings (6.3%) and a reduction in losses in our Advice business
(30.9%). This was partly offset by lower AMP Bank earnings (9.7%) due to previously flagged NIM compression, and lower
Group earnings which were impacted by lower PCCP sponsor valuations, lower China partnership earnings and higher
controllable costs arising from previously announced stranded costs of $20m from M&A transactions.
— FY23 NPAT (statutory) profit of $265m (FY22: $387m) was favourably impacted by a ~$245m net gain on sale of the AMP
Capital and SuperConcepts businesses, partly offset by recognition of certain one-off costs, including transformation costs,
provisions for financial adviser and shareholder class actions and leasing impairments resulting from subleasing activity
to reduce future property costs.
Key performance metrics
Earnings
EPS – actual (cps)
EPS – underlying (cps)
RoE – underlying
RoE – actual
Volumes
AMP Bank total loans ($m)
– Platforms AUM ($m)
– Master Trust AUM ($m)
– New Zealand Wealth Management AUM ($m)
Total AUM ($b)
Controllable costs (pre-tax) and cost ratios
Controllable costs – excluding discontinued operations ($m)
Cost to income ratio – excluding discontinued operations
FY23
FY22
9.3
6.8
5.0%
6.7%
24,441
71,060
51,865
10,853
133.8
744
69.0%
12.0
5.7
4.6%
9.7%
24,033
65,495
54,023
10,459
130.0
757
71.6%
Includes Strategic partnerships, Group costs not recovered from business units, investment income and interest expense on corporate debt.
1
2 Includes net gain on sale of AMP Capital and SuperConcepts businesses, transformation cost out and other one-off costs.
3 Includes earnings attributable to sold businesses of AMP Capital and SuperConcepts.
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Directors’ report
for the year ended 31 December 2023
— Basic earnings per share on a statutory basis for the year ended 31 December 2023 was 9.3 cents (FY22: 12.0 cents).
On an underlying basis, earnings per share was 6.8 cents, an increase of 19.3% on FY22, driven by the buyback of shares
as part of the capital management strategy.
— Underlying return on equity was 5.0% in FY23 (FY22: 4.6%). Total AUM across Platforms, Master Trust and New Zealand
Wealth Management of $133.8b in FY23 increased by $3.8b (2.9%) from FY22.
— Group cost-to-income ratio improved to 69.0% in FY23 from 71.6% in FY22. AMP’s controllable costs were $744m, $13m
lower than FY22 which is at the lower end of the guidance previously provided to the market, with cost out initiatives
continuing to negate the impacts of inflation and previously announced stranded costs of $20m.
2023 Business unit overview
AMP Bank
NPAT (underlying) of $93m decreased by $10m (9.7%) on FY22. Net interest income decreased 2.4% and net interest margin
was down 11bps to 1.27%. AMP Bank’s return on capital in FY23 was 7.9%, down from 9.3% in FY22 driven by lower profit.
During the period, AMP Bank targeted customer growth through digital and direct channels, growing to around 191,000
customers. AMP Bank provided over 9,000 customers with new home loans in FY23, and improved turnaround times
to an average of 8.7 days. AMP Bank continues to maintain a conservative approach to lending - 90+ day arrears was 0.62%,
and 43% of customers are ahead of their mortgage repayments by more than three months.
Platforms
NPAT (underlying) of $90m increased by $25m (38.5%) on FY22, predominantly driven by favourable North Guarantee
valuations movements arising from higher equity markets and higher investment income, partly offset by higher controllable
costs to support business growth.
Net cash inflows of $1,401m (FY22: $2,532m) were impacted by cyclical factors and economic conditions. This was particularly
evident in the IDPS segment with cost-of-living pressures and higher interest rates impacting flows. AUM based revenue
compared to average AUM of 47bps in FY23 was lower by 1bp compared to FY22, reflecting pricing changes from simplification.
The strategic focus on Independent Financial Advisers (IFAs) continues, with 31% of inflows to North now from IFAs, and with
IFA inflows increasing by 33% since FY22. Average AUM of $68.1b was $1.8b higher than FY22 at $66.3b, with continued growth
in managed portfolios where AUM now exceeds $13b.
Master Trust
NPAT (underlying) of $53m is in line with FY22, driven by lower controllable costs, partly offset by the impact on revenue
following the simplification of investment options and lower average AUM. Negative net cashflows included the impact
of a $4.3b mandate loss.
AUM based revenue compared to average AUM of 64bps in FY23 was lower by 3bps compared to FY22, driven by investment
simplification. Master Trust’s ongoing simplification initiatives are driving a lower controllable cost base (down 11% on FY22),
as well as enabling competitive pricing for members.
Advice
The improvement of the Advice business continues, with NPAT losses (underlying) of $47m reduced by $21m (30.9%) from
FY22, driven by continued focus on cost efficiency, with a $21m (15.2%) reduction in controllable costs. An 88.9% improvement
in variable costs from FY22 was driven by factors including the restructuring of the equity portfolio.
The quality of the AMP Advice Network remains high with 51% of practices generating over $1m of revenue. Adviser satisfaction
with licensee services also improved to 81% in the period, up from 68% at FY22.
New Zealand Wealth Management
NPAT (underlying) of $34m in FY23 is $2m higher than FY22. Lower AUM based revenue in FY23, as a result of divesting legacy
AUM revenue lines, has been offset by growth in non-AUM revenue. Net cash outflows of $160m are $34m higher than cash
outflows of $126m in FY22, with net outflows in wealth management products (-$304m) being offset by improved KiwiSaver
cashflows (+$144m), reflecting new member and contribution growth.
During the period, the acquisition of enable.me, a financial advice and coaching business, further diversified non-AUM based
revenue in New Zealand.
Strategic partnerships
Lower strategic partnerships earnings due to lower PCCP sponsor valuations impacted by US real estate and China
partnership earnings due to regulatory changes relative to FY22.
Capital, liquidity and dividend
Capital and liquidity
A number of operating entities within the AMP Group of companies are regulated, including AMP Bank (an authorised deposit
taking institution), superannuation entities, and the Advice businesses which have AFS Licence requirements. These companies
are regulated by APRA and ASIC and are required to hold minimum levels of regulatory capital and liquidity.
In addition, target capital requirements to maintain sufficient capital for AMP’s appetite for material risks are applied at the
business unit level and calculated that sufficient capital is reserved to ensure minimum regulatory requirements are upheld
under modelled stress scenarios comprising financial, product and operational risks as prudentially required.
AMP Group’s surplus capital as at 31 December 2023 was $565m (FY22: $923m) reflecting the receipt of proceeds and the
release of target capital requirements from the AMP Capital divestment, profits offset by share buybacks ($338m), the FY22
final dividend ($75m), the FY23 interim dividend ($70m), the redemption of eligible hybrid capital ($250m), and increases in the
minimum regulatory requirements of Bank, Platforms and Master Trust.
Dividend and capital return
In August 2022, AMP announced a $1.1b capital management program to return capital to shareholders. The first tranche of the
capital return ($350m) was delivered through on-market share buybacks and was completed on 29 March 2023.
The second tranche of the capital return ($400m) was delivered through on-market share buybacks ($255m) and final dividend
for FY22 ($75m) and interim dividend for FY23 ($70m). The completion of Tranche 1 and Tranche 2 represents $750m of capital
returned to shareholders.
The third tranche, representing the remaining $350m, is to be delivered through a final FY23 dividend of 2.0 cps (~$55m) franked at
20%, with the remaining $295m to be returned via further dividends which may be declared by the Board, and on-market buybacks
that are subject to shareholder approval, as required.
Strategy and future prospects
AMP’s strategy was updated in February 2024 to reflect the progress made to reposition and simplify the business. The strategy
focuses on three key themes:
Drive business line profitability and positive customer experience
— Drive performance across AMP’s operating business units, and refine retirement solutions in Platforms and Master Trust
to solidify AMP’s position in the retirement space. Address Net Interest Margin compression and return to an appropriate
level of Return on Capital in AMP Bank.
Efficient capital, cost and balance sheet management
— Right size corporate costs, deliver on business simplification program. Maintain disciplined capital management, reduce
net debt as appropriate and return surplus capital to shareholders.
Create new revenue sources and lasting points of differentiation
— Expand on channel opportunities, and extend retirement product innovation. Digital Business Bank to begin operating
in Q1 2025 to diversify bank funding mix.
Strategic priorities for 1H 24
AMP’s strategic priorities for 1H 24 align to these themes. Key focus areas include: Continuing to target reaching breakeven
in Advice; refining the retirement product offer in Master Trust; continuing to deliver against controllable cost targets;
progressing the digital business bank to launch in Q1 2025; investing in IFA sales and service in Platforms; and maintaining
performance in New Zealand.
Further detail on strategy and prospects is included in the Strategy section of this report on pages 10–11.
The Environment
In the normal course of its business operations, AMP is subject to a range of environmental regulations of which there have
been no material breaches during the year. You can find a review of AMP’s 2023 sustainability performance in AMP’s 2023
Sustainability report at corporate.amp.com.au/about-amp/corporate-sustainability, as well as further information on AMP’s
environmental policy and activities.
Events occurring after the reporting date
As at the date of this report and except as otherwise disclosed in this report, the directors are not aware of any other
matters or circumstances that have arisen since the reporting date that have significantly affected, or may significantly
affect, the group’s operations; the results of those operations; or the group’s state of affairs in future periods.
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Directors’ report
for the year ended 31 December 2023
The AMP Limited Board of Directors
The directors of AMP Limited during the year ended 31 December 2023 and up to the date of this report are listed below.
Directors were in office for this entire period except where stated otherwise:
Company secretary details
Details of each company secretary of AMP Limited as at the date of this report, including their qualifications and experience,
are set out below.
Current Non-executive Directors:
Debra Hazelton (Chair)
Kathleen Bailey-Lord (appointed as a director on 1 January 2024)
Andrew Best
Rahoul Chowdry
Mike Hirst
Anna Leibel (appointed as a director on 1 January 2024)
Michael Sammells
Andrea Slattery
Executive Director:
Alexis George (Chief Executive Officer and Managing Director)
Former Non-executive Director:
Kate McKenzie (resigned as a director on 31 December 2023)
Attendance at board and committee meetings
The AMP Limited Board met 20 times during the year ended 31 December 2023. The Chair and directors also attended other
meetings, including board committee meetings, special purpose committees, strategy sessions and advisory and working groups.
The Chair and directors also frequently attended meetings of committees, special purpose committees, and advisory and working
groups of which they were not a member during the year.
The table below shows details of attendance by directors of AMP Limited at meetings of boards, committees and advisory groups
of which they were members during the year ended 31 December 2023. Any voluntary attendances by directors in their capacity
as observers are not included in the table below:
AMP Limited
Board Meetings1
Audit
Committee
Risk Committee
Nomination
Committee
Remuneration
Committee
AMP Ltd ESG
& Sustainability
Advisory
Group 2
AMP Ltd
Technology
Transformation
Advisory
Group 3
Additional
Committees 4
A
20
20
20
20
20
20
20
20
B
20
18
20
20
20
20
19
20
A
–
–
5
–
5
5
–
–
B
–
–
5
–
5
4
–
–
A
–
7
7
7
–
7
–
–
B
–
7
7
7
–
7
–
–
A
5
5
5
5
5
5
5
–
B
5
4
5
5
5
4
4
–
A
6
2
–
6
6
–
1
–
B
6
2
–
6
6
–
1
–
A
4
–
–
–
4
4
–
–
B
4
–
–
–
4
4
–
–
A
–
2
–
2
–
–
2
–
B
–
2
–
2
–
–
2
–
B
6
–
2
4
4
–
–
–
Board/committee
Held/attended
Debra Hazelton
Andrew Best5
Rahoul Chowdry
Mike Hirst
Michael Sammells
Andrea Slattery
Kate McKenzie6
Alexis George
Column A – indicates the number of meetings held while the director was a member of the board/committee. Directors may, and frequently do,
attend meetings as observers if they are not a member of the committee.
Column B – indicates the number of those meetings attended.
1 Where board and committee meetings of AMP Limited and AMP Bank Limited were held concurrently, only one meeting has been recorded.
2 AMP Ltd ESG & Sustainability Advisory Group established 1 October 2022 and ceased 31 August 2023.
3 AMP Ltd Technology Transformation Advisory Group established 1 October 2022 and ceased 30 June 2023.
4 Additional committees were convened during the year on matters including board succession and renewal matters and financial results.
5 Andrew Best was a member of the Remuneration Committee effective 1 September 2023.
6 Kate McKenzie was a member of the Remuneration Committee effective 1 July 2023–31 August 2023, and retired as a Non-executive director
of AMP Limited effective 31 December 2023.
David Cullen, Group General Counsel
BCom, LLB, LLM
David was appointed as the Company Secretary for AMP Limited on 4 March 2022. David joined AMP in September 2004 and
was appointed Group General Counsel in May 2018. David has group-wide responsibility for AMP’s legal and governance
functions. Prior to his appointment as Group General Counsel, David was the Group Company Secretary and General Counsel,
Governance at AMP, which included acting as Company Secretary for AMP Limited.
Kate Gordon, Head of Corporate Governance
BA (Juris), LLB, LLM
Kate was appointed as the Company Secretary for AMP Limited on 4 March 2022 and is also secretary of several other AMP
group companies. Kate joined AMP as Senior Company Secretary & Senior Legal Counsel in June 2020. Kate has significant
experience in the legal profession with expertise in corporate governance, mergers & acquisitions, corporate and commercial
law. Before joining AMP, Kate worked at Henry Davis York (now Norton Rose Fulbright) and HWL Ebsworth Lawyers.
Indemnification and insurance of directors and officers
Under its constitution, the company indemnifies, to the extent permitted by law, all current and former officers of the company
(including the non-executive directors) against any liability (including the costs and expenses of defending actions for
an actual or alleged liability) incurred in their capacity as an officer of the company. This indemnity is not extended to current
or former employees of the AMP group against liability incurred in their capacity as an employee, unless approved by the
AMP Limited Board.
During, and since the end of, the financial year ended 31 December 2023, the company maintained, and paid premiums for,
directors’ and officers’ and company reimbursement insurance for the benefit of all of the officers of the AMP group (including
each director, secretary and senior manager of the company) against certain liabilities as permitted by the Corporations Act
2001. The insurance policy prohibits disclosure of the nature of the liabilities covered, the amount of the premium payable and
the limit of liability.
In addition, the company and each of the current and former directors, and a subsidiary of the company and each of the company
secretaries, are parties to deeds of indemnity, insurance and access. Those deeds provide that:
— these officers will have access to board papers and specified records of the company (and of certain other companies)
for their period of – office and for at least 10 (or, in some cases, seven) years after they cease to hold office (subject
to certain conditions);
— the company indemnifies the directors, and a subsidiary of the company indemnifies the secretaries, to the extent permitted
by law, and to the extent and for the amount that the relevant officer is not otherwise entitled to be, and is not actually,
indemnified by another person;
— the indemnity covers liabilities (including legal costs) incurred by the relevant officer in their capacity as a current or former
director or secretary of the company, or as a director or secretary of any AMP group company or an AMP representative
in relation to an external company; and
— the company will maintain directors’ and officers’ insurance cover for the directors, to the extent permitted by law, for the
period of their office and for at least 10 years after they cease to hold office.
Indemnification and insurance of auditors
To the extent permitted by law, the company has agreed to indemnify its auditor, Ernst & Young, as part of the terms of its
audit engagement agreement, against claims by third parties arising out of or relating to the audit or the audit engagement
agreement, other than where the claim is determined to have resulted from any negligent, wrongful or wilful act or omission
by or of Ernst & Young. No payment has been made to indemnify Ernst & Young during or since the financial year ended
31 December 2023.
Remuneration disclosures
The remuneration arrangements for AMP directors and senior executives are outlined in the remuneration report which forms
part of the directors’ report for the year ended 31 December 2023. Directors’ and senior executives’ interests in AMP Limited
shares, performance rights and options are also set out in the remuneration report on the following pages.
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Remuneration
report
I would like to thank our CEO Alexis,
as well as the executive team and
all AMP employees. Their dedication
and hard work during the year has
continued to drive AMP forward
in its strategy.
Dear fellow shareholder
Thank you for taking the time to read AMP’s Remuneration Report
for 2023.
Overview of 2023
As Debra and Alexis have outlined earlier in this annual report,
2023 was a year of progress for AMP against our strategy
to reposition and simplify the business. We completed the sale
of AMP Capital, as well as other non‑core businesses including
SuperConcepts, and resolved several material legacy matters
that enable us to focus on the future of the business. We made
further progress on our strategy to create a simpler, more focused
wealth management and banking business across Australia and
New Zealand, and the focus has now turned to right‑sizing AMP’s
operations for the shape of the business going forward.
AMP’s approach to remuneration
The Board seeks to achieve a balance between remuneration
outcomes and shareholder experience. In doing so, we consider
how to attract and incentivise the right executive talent to deliver
on AMP’s strategy, as well as recognising the importance of aligning
management’s interests to those of our shareholders. This means
recognising and rewarding the achievements and the progress that
has been made during the period, while overlaying the experience
of our shareholders and ensuring that the outcomes for executives
appropriately reflect that.
Listening and responding to feedback on the
2022 Remuneration Report
Following the 2023 AGM, where AMP received a ‘first strike’ against
the adoption of its 2022 Remuneration Report, the board sought
further feedback from shareholders, their representatives and
proxy advisors on the matter of remuneration. Following this,
we have carefully considered the feedback received and where
appropriate, taken action to address some of their key concerns.
Remuneration report
Contents
1
First strike
2 Remuneration
snapshot
3
4
5
6
Remuneration
strategy and framework
Performance and
reward outcomes
Remuneration
governance
Non-executive director
fees and shareholding
requirements
7 Statutory tables
8 Looking forward to 2024
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50
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64
67
69
76
— In particular, we know that the balance of financial
and non‑financial metrics in AMP’s 2023 performance
scorecard is an area of focus for our shareholders,
proxy advisors and other stakeholders. During the
year, the board made changes to reflect this feedback,
increasing the weighting of financial metrics to 60%
(from 40%) by assessing strategic objectives through
quantifiable financial metrics. This further strengthens
management’s alignment with shareholders’ interests,
while maintaining a material weighting to non‑financial
metrics, in line with the requirements of APRA’s
prudential standard CPS 511.
— Furthermore, we recognise that the use of upward
discretion in 2022 was an area of concern for some
stakeholders. The use of upward and downward
discretion by the Board in recent years has always
sought to ensure that management is appropriately
rewarded to reflect what has been achieved in that
period. For example, the Board exercised judgment
and reduced the 2023 statutory net profit after tax
(NPAT) outcome on the Scorecard, taking into account
the overall quality of AMP’s financial performance.
We will continue to seek to align remuneration
outcomes with performance outcomes, including
financial results, considering shareholder experience
and expectations.
— We understand the importance of transparency related
to the alignment between pay and performance, and
the board has committed to retrospectively disclose
short term incentive (STI) targets, together with the
outcomes delivered in the performance year. You can
read more about this in section 4.2 of this report.
— Some stakeholders raised concern with the
weighting and inclusion of RepTrak as a measure
within our Long Term Incentive (LTI) plan. Building
trust and driving a strong reputation with AMP’s
stakeholders is clearly fundamental to our success
as an organisation. AMP’s RepTrak score has been
part of our incentive scorecard for the past three
years, and is measured on an absolute basis. In order
to meet the requirements of CPS 511, we have now
also included RepTrak as a measure for LTI purposes,
on a relative basis against a chosen comparator
group. The board considers that as these measures
are calculated on a different basis, it is appropriate
that management is focused on both the short‑term
absolute performance, as well as the long‑term relative
performance of AMP’s reputation. There is further detail
on the way this is measured in section 1.2 of this report.
— To reflect the changed portfolio and scale of the
business, and in response to stakeholder feedback
on CEO and Non‑executive director (NED)
remuneration quantum, during the year we updated
our remuneration benchmark group to reflect the
relative size and complexity of our reshaped portfolio.
Board fees were also reviewed in 2023 against this
group of companies and overall NED fees have
reduced by more than 43% from 2019 to 2023. For 2024,
we do not anticipate any increases to NED fees, nor
any increases to Executive KMP fixed remuneration
levels (unless there is a change in the scope of role).
You can read more about AMP’s response to the feedback
we received, and specific actions taken to address this,
in section 1.2 of this report. The Board values an open and
constructive dialogue about AMP’s remuneration framework
and approach with our stakeholders. We appreciate and
welcome your feedback.
2023 STI outcomes
The board carefully assessed the 2023 scorecard result,
as well as considering the economic and operating
environment, and shareholder experience during the
performance year. As a result, the board has determined
the incentive pool funding of 75%. For the CEO and other
Executive Key Management Personnel (KMP), this has
resulted in an average STI outcome of 73.5% of target,
or 36.7% of the maximum opportunity. In determining this
outcome, the Board believes it has balanced the shareholder
experience with rewarding, retaining and incentivising those
executives key to the long‑term successful execution of AMP’s
strategy. An overview of the STI performance objectives and
assessment is in section 4.2.
LTI plan outcomes
During 2023, several LTI plans were performance tested.
As announced at our 2023 AGM, the board determined
that the 2019 Transformation Incentive Award that was
performance tested in February 2023, was below the
minimum threshold for any vesting and therefore the
performance rights granted under this plan were lapsed.
Furthermore, both the 2021 LTI plan and two tranches under
the CEO’s sign‑on award granted in August 2021, were
performance tested and did not satisfy the shareholder
return measures. As a result, the performance rights
granted under these plans lapsed. Further details on the
performance testing and outcomes for these awards can
be found in section 4.4.
Key Management Personnel
Having made significant change to AMP and simplified the
portfolio since the appointment of Alexis George as CEO,
during 2023 we further streamlined the organisational
structure to remove one of the Key Management Personnel
(KMP) roles on our Executive Committee, the Chief Executive
– Australian Wealth Management. This has resulted in more
of our core business leaders reporting directly to the CEO,
and fewer KMP, which is more appropriate for the size
of the business.
I would like to thank our CEO Alexis, as well as the executive
team and all AMP employees. Their dedication and hard
work during the year has continued to drive AMP forward
in its strategy. There remains much to do, and we recognise
the hard work that it has taken to get to this point.
Michael Sammells
Chair, Remuneration Committee
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Remuneration report
This report details the remuneration framework and outcomes for Key Management Personnel
(KMP) of AMP Limited for the year ended 31 December 2023. It has been prepared and audited
in accordance with the disclosure requirements of the Corporations Act 2001.
1
Section
First strike
1.1
Response to 2023 no vote
At AMP’s 2023 Annual General Meeting (AGM), 49.10% of votes cast were against the adoption of the 2022 Remuneration
Report, constituting a ‘first strike’ under the Corporations Act. Following this outcome, the board has further considered AMP’s
executive remuneration framework and engaged with shareholders, proxy advisers and other stakeholders to understand
their concerns. The board has listened and taken all comments into consideration in an effort to achieve a balance between
remuneration outcomes and shareholder experience, while at the same time considering how to attract and incentivise the
right executive talent to deliver on AMP’s transformation strategy.
1.2
Specific feedback received and AMP’s response
1.2
Specific feedback received and AMP’s response continued
Areas of concern
from stakeholders
AMP’s response
Fixed remuneration (FR)
and maximum quantum
of remuneration
of Executive KMP,
in particular the CEO,
to be aligned to the
size of the company
When Alexis George was appointed as CEO (August 2021), her remuneration package was set
taking into account a number of factors that were relevant and appropriate at the time, including
AMP’s market capitalisation. Since her appointment, the CEO has not received an increase in FR,
nor has her variable remuneration opportunity changed. There is no intention to increase the CEO
and other Executive KMP’s remuneration levels for 2024.
A number of qualitative and quantitative factors are considered in setting remuneration levels for
the non-executive directors, executives and other employees. AMP’s approach is to ensure that
total remuneration, regardless of an employee’s level in the company, remains market competitive,
in order to attract and retain high-performing talent to deliver AMP’s strategy.
During the year AMP reassessed and changed its remuneration benchmark group to better
reflect the relative size and complexity of the smaller business. In determining appropriate
remuneration levels in addition to the external benchmarking, judgements are required that
take into account not only size and market capitalisation, but also ensures comparison to those
companies that operate within the same industry, are subject to the same regulations and scrutiny,
and have similar levels of complexity. We recognise that we have become a smaller organisation
and, in those instances, where roles were historically positioned at higher levels relative to our
positioning today, we aim to align them to the median of the benchmark group over time.
The following table summarises key feedback received from some shareholders and proxy advisors in the lead up to and
at AMP’s 2023 AGM, and AMP’s response to their key concerns.
Level of non-executive
director fees
Board fees were also reviewed in 2023 against the revised remuneration benchmark peer group
and are comparable to the market. Overall NED fees have reduced by more than 43% in total from
2019 to 2023. Please refer to section 6.1 for a more detailed explanation.
Areas of concern
from stakeholders
AMP’s response
Pay for Performance
Alignment of
remuneration outcomes
with financial results
Use of upward
discretion in 2022
The board acknowledges the feedback from the market with regards to positive discretion
particularly in light of the share price decline post results release. The board remains committed
to being transparent in its efforts to align remuneration outcomes with performance outcomes,
and the consideration of shareholder experiences and expectations.
The 2022 STI outcomes for the CEO and other Executive Committee (ExCo) members were
allocated based on performance against the 2022 scorecard in addition to other performance
factors that occurred during the year, that were not envisaged at the start of 2022, including
a pivot from listing AMP Capital to divesting the business through a series of trade sales.
The board exercised upward discretion of 15% which was withheld until regulatory approval was
received for the commencement of the second tranche of capital return, aligning management
and shareholder interests. The board deemed that upward discretion was warranted due to the
value creation and strategic delivery during the year related to the AMP Capital sales with
management essentially having completed all work within their control by year end.
The board exercises discretion to ensure that management is rewarded appropriately and
there is appropriate variability in pay-for-performance outcomes. For example, in 2021, the
board exercised downward discretion with respect to Executive KMP STI outcomes, recognising
shareholder experience and the impacts of organisational instability during the first half of 2021.
The board determines the AMP incentive pool based on a holistic assessment of company
performance and relies on clearly defined principles in exercising its discretion. This includes
taking into consideration various factors, including the overall company performance, risk,
reputation and shareholder experience, from both an outcome and stakeholder expectation
perspective. For further information, refer to the STI adjustment principles in section 3.2 and the
overall remuneration adjustment guidelines in section 5.2.
STI Framework
Balance between
financial and
non-financial metrics
and choice of strategic
measures included
in the 2023 Scorecard
During the year, the board made changes to the 2023 scorecard to reflect this stakeholder
feedback, increasing the weighting of financials to 60% (from 40%) and replacing those
non-financial strategic metrics with quantifiable financial metrics.
Former
40% Financial
— Statutory Net Profit After Tax
— Underlying Net Profit After Tax
20% Strategic
— Bank strategic objectives tracking to plan
— Wealth Management strategic objectives
tracking to plan
— Tracking to approved business benefits case,
including mission timeline
Current
60% Financial
— Statutory Net Profit After Tax
— Underlying Net Profit After Tax
— Bank Return on Capital (ROC)
— Platforms Net Cash Flow
— Total Controllable Costs
The change strengthens management’s alignment with shareholders’ interests, whilst maintaining
a material weighting to non-financial metrics per the requirements of CPS 511. The weighting
of non-financial metrics across total variable reward for the CEO and other ExCo members
remains material at 35% in aggregate.
Disclosure of
alignment between
pay and performance,
including disclosure of
retrospective STI targets
The board has committed to retrospectively disclosing the STI targets together with the outcomes
delivered in the performance year. Refer to section 4.2 of this report.
The changes made to the 2023 Scorecard (outlined above) were also disclosed to the market
as part of the 2023 Half Year Results Directors’ Report.
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Remuneration report
1.2
Specific feedback received and AMP’s response continued
1.2
Specific feedback received and AMP’s response continued
Areas of concern
from stakeholders
AMP’s response
Shareholder alignment
NED ownership
levels are lagging
against the Minimum
Share Ownership
requirements
Between 2019 and 2022, opportunities for NEDs to acquire shares during the trading windows
in accordance with AMP’s Trading Policy were limited due to ongoing transactions, including
the sale of AMP Life, portfolio review and sales of AMP Capital businesses. Furthermore, AMP’s
Trading Policy has historically prescribed trading windows following the release of half year and
yearly financial results and the Annual General Meeting, meaning NEDs and other designated
employees had limited opportunities throughout the year to trade in AMP securities.
During 2023, the trading policy was amended to move from trading windows to black-out
periods. This change not only aligns with the market practice observed amongst our financial
services peers, but also creates more opportunities for NEDs and other designated employees
to acquire AMP securities during appropriate periods.
Details of the NED and Executive KMP minimum shareholding requirements can be found
in sections 3.2 and 6.2, respectively.
Areas of concern
from stakeholders
LTI Framework
Use of three-year
performance period
as opposed to four
AMP’s response
In reviewing the executive remuneration framework, the board considered the performance
period of the LTI. A three-year performance period was adopted due to the following reasons:
— With three long term performance metrics in the LTI plan, (Relative Total Shareholder
Return (RTSR), and the two new metrics of Reputation (based on RepTrak performance) and
adjusted Earnings Per Share (EPS) Growth), a consistent performance period across all three
metrics is preferred. Setting targets and strategy for a period of greater than three years
is challenging given the company transition, market and external environment.
— Whilst the majority of ASX100 Financial Services companies have moved to a performance
period of four years, the majority of these companies are within the ASX50 and much larger
in size compared to AMP. There is more prevalence of three-year performance periods
among companies below the ASX100, such as AMP. Furthermore, at the time changes to the
2023 LTI design were being contemplated, the revised framework met and continues to meet
the voting guidelines of proxy advisors, in particular, that LTI performance periods should be
at least three years.
— The LTI plan has a three-year performance period plus additional restriction periods of up to
three years in the case of the CEO (and an additional two years for the other ExCo members),
ensuring management interests are aligned with shareholders’ interests over the initial three-year
performance period and also over the remaining deferral period, which is up to a six- year
period in total for each grant.
Appropriate weighting
of financial and
non-financial metrics
The board included RepTrak as an LTI measure to align to the requirements of CPS511, which
requires material weight to be provided to non-financial measures. The externally managed
RepTrak measure has been given a 30% weighting, ensuring an appropriate balance between
the requirements of CPS 511 and a continuing focus on financial performance.
Inclusion of RepTrak
as an LTI metric
Including RepTrak in
both the Scorecard and
LTI design, is rewarding
management twice for
the same work
Building trust with stakeholders and continuing to improve AMP’s reputation with customers
and the wider community remains paramount as a key enabler in how we create value. After
considering various non-financial metrics, the board selected reputation as a measure for the LTI,
as it is key to successful delivery of AMP’s transformation strategy. The score measures corporate
reputation across a broad range of areas, including scores for products and services, corporate
citizenship, conduct, workplace, leadership, performance and innovation. The reputation metric
uses data provided by RepTrak, an independent provider, making the measure comparable
to benchmarks and the market over time.
Furthermore, over the last twelve months, the use of a RepTrak score as a non-financial metric
in assessing company performance is becoming more prevalent, particularly in the financial
services industry following the introduction of the CPS 511 requirement to have a material
weighting to non-financial metrics.
RepTrak has been part of AMP’s Scorecard for the past three years and is measured on an
absolute basis. The board determined to include RepTrak in both STI and LTI measures as they
are calculated on a different basis. RepTrak for STI purposes (which accounts for 7.5% of the
scorecard) is measured annually based on our score, ensuring that management is focused
on continual improvement each year and progressively contributing to the overall long-term
recovery of our Reputation. Whereas, for LTI purposes, RepTrak is measured on a relative basis
and tracks the long-term performance in our RepTrak score relative to the chosen comparator
group (refer to section 3.2), ensuring that management’s performance is measured on a basis
that removes the impacts and/or influences of the market (i.e., removing the likelihood
of a scenario where favourable market factors benefit all market participants). Including RepTrak
in both the STI and LTI ensures that management are focused on both the short term absolute
performance and long term relative performance.
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Remuneration report
2
Section
Remuneration snapshot
2.1
Key management personnel
Name
Position
Executive KMP
Alexis George
Sean O’Malley
Chief Executive Officer
Group Executive, AMP Bank
Nicola Rimmer-Hollyman
Chief Risk Officer
James Georgeson
Chief Financial Officer
Peter Fredricson
Chief Financial Officer
Term as KMP
Full year
Full year
Full Year
Until 6 January 2023
9 January 2023 to 29 May 2023
From 3 July 2023
Blair Vernon
Scott Hartley
Chief Financial Officer
Chief Executive Officer, Australian Wealth Management
Until 28 July 2023
Non-executive directors
Debra Hazelton
Chair
Andrew Best
Non-Executive Director
Rahoul Chowdry
Non-Executive Director
Michael Hirst
Non-Executive Director
Kathryn McKenzie
Non-Executive Director
Michael Sammells
Non-Executive Director
Andrea Slattery
Non-Executive Director
Full year
Full year
Full year
Full year
Full year
Full year
Full year
In 2023, AMP announced changes to the organisation’s structure and consequently, AMP’s executive leadership team.
The changes are summarised below.
— Chief Financial Officer: In November 2022, AMP appointed Peter Fredricson as CFO, replacing James Georgeson.
In May 2023, AMP announced Mr Fredricson’s retirement and further simplification and streamlining of the business.
The role of CFO and Group Executive Transformation were consolidated, and Blair Vernon was appointed to this
expanded role effective 3 July 2023.
— Chief Executive Officer, Australian Wealth Management (AWM): In line with simplifying the organisation, the role
of CEO AWM was removed as part of the transition to AMP’s new operating model and a flatter organisational structure.
Mr Hartley remained CEO AWM until 28 July 2023. As a result, the respective leadership roles of the Platforms, Advice
and Superannuation and Investment businesses were elevated to report directly to the CEO and form part of Executive
Committee. Edwina Maloney and Matt Lawler continue to manage the Platforms and Advice business units, respectively,
and Melinda Howes was appointed as the Group Executive for the Superannuation and Investments business unit and
commenced in the role on 29 January 2024. These new roles were deemed to not meet the definition of KMP.
→ Further information regarding these announcements can be found on AMP’s Shareholder Centre
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2.2
Remuneration principles
The goal of AMP’s remuneration strategy is to align performance, prudent risk management and reward outcomes.
It is designed to support the attraction, retention and reward of high-performing talent required to deliver strong customer
outcomes, sustained returns to shareholders and foster an environment where AMP’s employees can thrive. At the beginning
of each year the board sets the scorecard for the performance period to support the achievement of the business strategy.
The scorecard consists of five key strategic priorities as outlined below and the board determines the appropriate objectives,
metrics and targets. Outcomes awarded under AMP’s remuneration framework reflect both what the strategy seeks to deliver
and how it is delivered, as the performance assessment explicitly considers not only the financial and strategic priorities
delivered but also relies on the visible demonstration of AMP’s desired culture, purpose and values, and conduct expectations.
Risk is considered in all elements of the remuneration framework and the decision making process with respect to remuneration
outcomes, as detailed in section 5. The remuneration principles provide AMP with the flexibility to address the challenges
in attracting and retaining talent, remaining competitive and differentiating for performance.
Our Remuneration principles
Market competitive
to attract the
right people
Reflect AMP’s
purpose and
values
Differentiate for
performance and
adjust for risk
Linked to strategy
and sustainable
value creation
Balance interests
of customers, people
and shareholders
1.
Purpose
5. Key result
areas
6. Deliver
& track
7. Performance
assessment
8. Reward
Short term incentive short term incentive
2.
3.
Strategy
Business unit
strategy
Bank
Platforms
Advice
Master Trust
New Zealand
Financials
Strategy
Customer
People
Risk
Enabling functions
4.
Shareholder
experience
Relative TSR
Relative
reputation score
Absolute EPS
Plan
– Set AMP Scorecard
for the year ahead
Track
– Track progress
quarterly
What
– AMP scorecard and
other outcomes
– Individual
Performance
Assessment
Report
– Report progress to
board quarterly
– Review and overlay
qualitative risk
assessment quarterly
Long term incentive
Plan
– Set LTI targets at the
start of the three year
performance period
How
– Values and behaviours
– Risk management
What
– TSR performance
against ASX200
Financials ex A-REITS
– RepTrak performance
against 15
organisations from
RepTrak’s benchmark
60 index
– Adjusted EPS between
4% and 8%
D
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The board determines
the AMP incentive pool
based on a holistic
assessment of company
performance.
Individual outcomes
based on AMP incentive
pool, business unit
performance and
individual performance
assessment, are
recommended by the:
– CEO for each
Executive
Committee member
– the Chair of the AMP
Board for the CEO
The board determines
the outcomes for
each LTI performance
measure and determines
the number of
performance rights
that vest into restricted
shares for up to two
to three years.
48
Remuneration report
2.3
2023 remuneration outcomes summary
2.3
2023 remuneration outcomes summary continued
Scorecard result
CAGR TSR
Performance period
Peer group
Outcome
2019 Transformation Incentive Plan
75%
Total Pool
75%
1 Aug 2019
↓
S&P/ASX 100
Financials
-6.4%
15 Feb 2023
Ex A-REITS
CAGR TSR
→ Refer to section 4.4 for further information
LTI result
(% vested)
0%
2023 STI outcomes
Financial
Finance & Strategy Weighting
% Achieved
Weighted outcome
60%
53%
31.8%
Non‑financial
Customer
People
Risk
15%
117%
17.6%
15%
104%
15.6%
10%
100%
10.0%
→ Refer to section 4.2 for further information
2023 LTI Plan outcome
RTSR
Performance period
Peer group
Ranking
1 Jan 2021
↓
S&P/ASX 100
Financials
31 Dec 2023
Ex A-REITS
7TH
Percentile
LTI result
(% vested)
0%
→ Refer to section 4.4 for further information
2.4
Actual remuneration realised in 2023
Under AMP’s 2023 remuneration framework, executives are eligible to receive a mix of fixed remuneration, STI
(delivered 60% in cash and 40% deferred in share rights, see section 3.1) and LTI (delivered 100% in performance rights).
The table below sets out the actual remuneration received during 2023 for those executives who were deemed KMP
as at 31 December 2023 and the market value of any equity vested during 2023 that was awarded in prior years
(either as deferred STI and/or LTI).
This information differs from the statutory remuneration table which presents remuneration in accordance with Australian
Accounting Standards. Statutory disclosures are included in section 7.1.
Executive KMP
Alexis George
Sean O'Malley
Nicola Rimmer-
Hollyman
Blair Vernon 7
Fixed 1
remuneration
$'000
2023 Cash
STI paid 2
$'000
1,715
1,715
637
600
600
517
462
–
772
655
272
204
192
151
218
–
Other cash
awards
paid 3
$'000
257
–
90
–
57
–
–
–
Year
2023
2022
2023
2022
2023
2022
2023
2022
STI & other
equity
awards
vested 4
$'000
LTI equity
awards
vested 5
$'000
Total
remuneration
received
$'000
Benefits 6
$'000
239
420
115
48
–
–
–
–
–
–
–
–
–
–
–
–
1
2
–
4
2
–
51
–
2,984
2,792
1,114
856
851
668
731
–
1 Fixed remuneration (FR) includes superannuation and salary sacrificed benefits and reflects the time in role during 2023.
2 Cash STI paid during the relevant year is based on outcomes related to the applicable year’s performance and reflected for the relevant
reporting period. Cash STI represents the 60% portion of the total STI awarded to be paid as cash in March 2024, with the remaining 40%
of the STI award will be deferred in share rights in April 2024.
3 As outlined in our 2022 Remuneration Report, the board withheld a portion of the 2022 cash STI, which was only to be released upon the
commencement of the second tranche of the capital return. The second tranche of capital return commenced from April 2023, therefore this
withheld amount was paid on April 2023 and is included in this column.
4 The value of vested equity awards is calculated based on the units which vested multiplied by the five-day volume weighted average price
(VWAP) up to and including the vesting date of each award. The amounts disclosed includes the portion of Alexis George’s sign-on awards
that vested during 2023 and 2022 and tranche 1 of the 2021 Deferred STI.
5 No LTI equity awards vested during 2023 or 2022.
6 Other benefits may include non-monetary benefits and any related FBT exempt and FBT payable benefits, excluding salary sacrificed benefits.
For Blair Vernon, the amount also includes a one-off relocation allowance and the provision of taxation advice and services as part of his
relocation package in moving from New Zealand to Australia.
7 For Blair Vernon, the amounts disclosed reflects remuneration paid in line with his KMP period. Refer to Section 2.1 for further information.
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3
Section
Remuneration strategy and framework
3.1
Remuneration framework and mix
The following diagrams illustrate the remuneration framework that applied in 2023 to AMP’s ExCo, which includes the Executive
KMP. It is underpinned by the remuneration governance, risk management and consequence management frameworks and
is subject to AMP Board discretion. Through variable remuneration and deferrals, emphasis is placed on reward, balancing the
retention and motivation of executives, whilst aligning to shareholder experience, long-term sustainable value creation and
compliance with regulatory frameworks. By deferring variable reward, executives are aligned to shareholders’ interests and held
accountable (individually or collectively) over the long term as the board has the ability, if appropriate, to adjust past, present
and future remuneration downwards through clawback and malus (refer to sections 5.2 and 5.3 for further information).
AMP’s remuneration framework
Short Term Incentive
3.1
Remuneration framework and mix continued
Remuneration mix
The remuneration mix for the CEO and other ExCo members (excluding the CRO) at maximum opportunity delivers 75%
of total remuneration as variable reward, and therefore represents ‘at risk’ remuneration. The CRO’s remuneration mix
is different to the other ExCo members in order to maintain the independence of the role and safeguard against any
conflicts of interest in carrying out the risk control function across the organisation.
CEO and other Executive Committee members
Chief Risk Officer
Fixed Remuneration
STI Cash
25%
30%
STI Deferred Share Rights 20%
LTI Performance Rights
25%
Fixed Remuneration
STI Cash
32%
27%
STI Deferred Share Rights 18%
LTI Performance Rights
23%
3.2
Remuneration framework details
Opportunity
Performance and vesting periods
Fixed remuneration and contracts
CEO & Executive KMP
YR1
YR2
YR3
YR4
YR5
YR6
Fixed Remuneration
STI Cash – 60%
STI deferral – 40%
Target: 100% of FR
Max: 200% of Target
(or 200% of FR) 1
1/3
1/3
1/3
Performance
Period
– 1 year
Restriction Period
Long Term Incentive
CEO
YR1
YR2
YR3
YR4
YR5
YR6
Opportunity
Performance and vesting periods
LTI – RTSR
Market hurdle 35%
LTI – EPS
Other financial 35%
LTI – Reputation
Non-financial 30%
Executive KMP
LTI – RTSR
Market hurdle 35%
LTI – EPS
Other financial 35%
LTI – Reputation
Non-financial 30%
Up to 100% of FR
in performance
rights 2
Up to 100% of FR
in performance
rights 1,2
Performance Period – 3 years
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1/3
1/3
1/3
1/3
1/3
1/3
1/3
Restriction Period
1/2
1/2
1/2
1/2
1/2
1/2
1 The Chief Risk Officer’s (CRO) STI target is 70% of FR (maximum is 200% of target or 140% of FR) and LTI maximum opportunity is up to 70% of FR.
2 The LTI is allocated using a face value methodology.
Performance Period – 3 years
Restriction Period
Purpose
Fixed remuneration is determined with reference to the size of the role, the executive’s skill and experience and benchmarking
practices as described below, to ensure that remuneration levels are market competitive to attract and retain talent.
Market positioning and remuneration benchmarking group
The Remuneration Committee utilises market data as part of the review process. Remuneration levels are compared
to a benchmarking group comprising a subset of the companies from the ASX200 Financials (ex A-REITS), adjusted
on a periodic basis to reflect appropriate size, market capitalisation and other qualitative factors. Adjustments to the
benchmarking group include removing the big five banks, foreign organisations listed on the ASX and organisations that
do not directly compete in the same industry/sector as AMP (e.g., insurance companies). In setting remuneration levels,
we take into account both internal and external relativities based on our positioning within the benchmarking group. However,
we recognise that we have become a smaller organisation and, in those instances, where roles were historically positioned
at higher levels relative to our positioning today, we aim to align them to the median of the benchmark group over time.
Fixed remuneration increases
The board reviews the CEO and other ExCo members’ fixed remuneration annually. As disclosed in the 2022 Remuneration
Report, there were no fixed remuneration increases in 2023 other than the fixed remuneration increase awarded for the
Group Executive AMP Bank, Sean O’Malley, whose remuneration increased by 8.3%, effective 1 April 2023. This change was
to reflect fixed remuneration levels of similar roles in other ASX financial services entities and an acknowledgement of his
contribution and performance in the role. For 2024, there are no planned fixed remuneration increases for the CEO or other
ExCo members, unless there is a change in scope of role.
Contract terms
Contract terms
CEO
Length of contract
Open-ended
Executive KMP
Open-ended
Notice period
Six months by AMP or by Alexis George
Six months by AMP or the executive
Entitlements on termination
— Accrued fixed pay, superannuation and other statutory requirements.
— Executives eligible for incentives may be awarded on a pro rata basis for the current period in the case of death,
disablement, redundancy, retirement or notice without cause, subject to the original performance periods and hurdle.
— In the event of redundancy, the AMP Redundancy, Redeployment and Retrenchment Policy in place at the time will
be applied. This is the same policy that applies to all employees at AMP.
— With respect to equity based awards already granted:
• Unvested rights will lapse if an executive resigns or is summarily dismissed before the vesting date. Should
an executive cease employment for any other reason, any unvested rights will be retained and vest in the
ordinary course subject to the original terms and performance conditions, if applicable.
• Vested rights will be retained but are subject to clawback, for example, in the case of serious misconduct.
Restrictions on termination benefits
AMP will not make payments on termination that require shareholder approval or breach the Corporations Act.
Post-employment restraint
Six-month restraint on entering employment with a competitor and 12-month restraint on solicitation of AMP clients and employees.
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3.2
Remuneration framework details continued
3.2
Remuneration framework details continued
2023 Short-term incentive
Overview
STI is the variable remuneration at-risk component designed to motivate and reward for performance
during the year.
STI opportunity
Target STI opportunity is 100% of fixed remuneration (FR) for the CEO and Executive KMP (70% of FR
for the CRO). Maximum STI opportunity is 2x target (including the CRO).
Award
determination
STI opportunity
STI outcome
FR
$
x
Target STI
opportunity
%
=
Target STI
opportunity
$
x
STI pool
outcome
→
Adjusted for
individual
performance
and behaviours
→
Risk
overview
=
Individual
STI
outcome
STI outcomes are determined with reference to the holistic performance of AMP and the AMP
incentive pool, and Executive KMP individual performance and behaviours. The AMP incentive pool
is determined by the board based on:
— A scorecard comprising financials, strategic, customer and people priorities and objectives that
supports AMP’s risk management framework.
— Other outcomes including shareholder value creation.
— Behaviour in line with AMP’s purpose and values, conduct and risk appetite.
The board considers both the achievement of the risk metrics as well as a risk overview when
determining the incentive pool.
Individual
performance
For Executive KMP, performance is assessed based on AMP and their business unit scorecards.
This ensures an executive’s performance is aligned to both company and their individual business
unit performance. Their individual performance, conduct and how they demonstrate the values is also
considered when determining the individual STI outcome.
Delivery
60% of the STI award is delivered as cash and 40% is deferred into equity.
Deferred STI is delivered as conditional share rights that represents the right to receive a fully-paid
ordinary AMP share (or a cash equivalent payment) for nil consideration subject to continued
employment at the time of vesting, aligning executives directly to the shareholder experience.
Vesting period
Performance period
Restriction period
YR1
YR2
YR3
YR4
YR5
Share rights
1/3
1/3
1/3
STI adjustment
principles
The board may, in its absolute discretion, adjust targets and/or outcomes upwards or downwards,
to ensure management has been rewarded appropriately. For example, where an event occurs that
means the targets of the relevant scorecard objective are no longer appropriate. Situations where this
discretion to adjust can be applied include:
— Factors not known or relevant at the beginning of the performance period which have a material
impact on performance, such as
• Material change to the strategic business plan.
• Material regulatory or legislative change.
• Material changes in external market or natural disasters.
•
Significant out of plan business development such as acquisitions and divestments.
— Material risk or conduct events that have impacted on shareholder experience, the reputation
of the company or led to disciplinary action from our regulators (refer to section 5).
Where these events result in a materially different outcome to forecasts, adjustments should reflect
the holistic contribution of employees/Executive KMP and exclude significant costs or gains that were
unforeseen, were not in the ordinary course of business or were not the direct result of Executive
KMP efforts.
Forfeiture (malus)
The board has the ability to adjust and lapse unvested equity (including downwards to zero) in a range
of circumstances, such as protecting financial soundness or responding to unexpected or unintended
consequences that were unforeseen (such as material risk management breaches, unexpected
financial losses, reputational damage or regulatory non-compliance). Refer to section 5.3 for further
information on how the board considers adjusting remuneration for material risk and conduct events.
2023 Long-term incentive
Overview
LTI awards granted during 2023 by the board in the form of performance rights that vest subject
to three measures: Relative Total Shareholder Return (RTSR), Adjusted Earnings Per Share (EPS)
and Reputation (based on relative RepTrak performance).
LTI opportunity
The total allocation value of LTI awards that was granted during 2023 to Executive KMP:
100% of FR for Executive KMP.
70% of FR for the Chief Risk Officer.
Allocation
methodology
Face value with the number of performance rights granted based on the Volume Weighted Average
Price (VWAP) of shares during the 10-trading day period up to 1 January 2023.
LTI opportunity
LTI grant
FR
$
x
LTI
opportunity
%
=
LTI
opportunity
%
÷
10-day VWAP
(face value
allocation)
=
Number of
performance
rights granted
Performance and
vesting period
The performance of each metric will be assessed from 1 January 2023 to 31 December 2025. If any
of the performance rights vest, there is a further restriction period of up to three years for the CEO
and two years for other Executive KMP, subject to continued service (per the diagram below).
CEO
YR1
YR2
YR3
YR4
YR5
YR6
Performance Period
Restriction Period
RTSR
Market hurdle 35%
EPS
Other financial 35%
Reputation
Non-financial 30%
Executive KMP
RTSR
Market hurdle 35%
EPS
Other financial 35%
Reputation
Non-financial 30%
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3.2
Remuneration framework details continued
3.2
Remuneration framework details continued
2023 Long-term incentive
2023 Long-term incentive
Performance
hurdles
RTSR – 35%
EPS – 35%
Reputation – 30%
35% of the LTI award will
be determined based on
AMP’s Compound Average
Growth Rate (CAGR) in
Total Shareholder Return
(TSR) relative to a peer
group of ASX 200 financial
companies excluding A-REITs
as at 1 January 2023. RTSR
performance is tested over
a three-year performance
period from 1 January 2023
through to 31 December 2025.
RTSR was chosen as it provides
a robust measure of AMP’s
financial performance and
returns for shareholders in
comparison to other companies.
35% of the LTI award is
determined based on AMP’s
Compound Average Growth
Rate (CAGR) in AMP’s adjusted
EPS. EPS is calculated by
dividing AMP’s underlying
net profit after tax for the
relevant reporting period
by the weighted average
number of ordinary shares
of AMP during the period. EPS
performance is tested over
a three-year performance
period from 1 January 2023
through to 31 December 2025.
EPS was chosen as
a measure as it provides
an appropriate proxy for
measuring intrinsic long-term
shareholder value creation
and ensures management
are assessed on their direct
financial contribution.
30% of the LTI award will be
determined based on AMP’s
RepTrak score performance
relative to a comparator
index as at 1 January 2023.
RepTrak score performance
will be tested over a three-
year performance period
from 1 January 2023 through
to 31 December 2025. As at
1 January 2023, the RepTrak
score for AMP is 57.8 and will
be used as the starting point
for testing purposes.
Reputation was chosen as
a measure as part of AMP’s
strategy to build trust with
stakeholders and restore the
AMP brand.
Vesting Schedule
Vesting Schedule
Vesting Schedule
CAGR TSR
performance
– AMP TSR
ranking
Proportion
of RTSR
component
vesting
CAGR EPS
performance
– AMP EPS
Proportion
of EPS
component
vesting
AMP RepTrak
Performance
< 50th
percentile
50th
percentile
> 50th
percentile
and < 75th
percentile
≥ 75th
percentile
0%
50%
Straight-line
vesting from
50% to 100%
(rounded to
the nearest
whole
percentile)
100%
< 4% per
annum
4%
0%
50%
> 4% and < 8% Straight-line
vesting from
50% to 100%
(rounded to
the nearest
whole
percentile)
≥ 8%
100%
< 50th
percentile
50th
percentile
> 50th
percentile
and < 75th
percentile
≥ 75th
percentile
Proportion
of RTSR
component
vesting
0%
50%
Straight-line
vesting from
50% to 100%
(rounded to
the nearest
whole
percentile)
100%
Peer/comparator
group
RTSR Peer Group
• ANZ
• ASX
• AUB Group
• Bank of
Queensland
• Bendigo &
Adelaide Bank
• Challenger
• Commonwealth
Bank of Australia
• Credit Corp
Group
• HUB24
• Insignia Financial
• Insurance
Australia Group
• Macquarie
Group
• Magellan
Financial Group
• Medibank Pvt
• National
Australia Bank
• Netwealth Group
• Nib holdings
• Perpetual
• Pinnacle
Investment
Management
Group
• QBE Insurance
Group
• Steadfast Group
• Suncorp Group
• Virgin Money UK
• Westpac Banking
Group
RepTrak Comparator Group
• AGL Energy
• Alinta
• ANZ Bank
• Australian
Taxation Office
• Commonwealth
Bank
• Medibank
• NAB
• NBN Co
• News Corp
• Optus
• Origin
• Reserve Bank
of Australia
• Rio Tinto
• Telstra
• Westpac Banking
Group
Vesting/forfeiture
conditions
If an executive is terminated for cause or gives notice of resignation to AMP before the vesting
date, all unvested rights (or restricted shares) will lapse or be forfeited, unless the board determines
otherwise. In all other cases, unless the board determines otherwise:
— A pro rata portion of the executive’s performance rights (calculated based on the portion of the
performance period that has elapsed up until the date of termination) will remain on foot to be
tested in the ordinary course.
— All restricted shares allocated to the executive on vesting of the performance rights will remain
on foot until the end of the relevant restriction period for each respective tranche.
Retesting
There is no retesting if the performance hurdle is not met.
Dividend
entitlements
Clawback/malus
No dividend is paid or payable on any unvested rights.
The board retains the discretion to adjust downwards and lapse the unvested portion of any LTI
award, including to zero in line with the Remuneration Adjustment Guidelines outlined in section 5.3.
3.3
Executive minimum shareholding requirements
The relevant amount of AMP equity required to be held by the Executive Committee (which includes the Executive KMP) under
minimum shareholding policy and the time to comply is as follows:
Category
Fixed Pay
Timeframe
Securities included to meet requirements
CEO
Executive KMP
200%
100%
Executive KMP are expected
to achieve the minimum
shareholding requirement
within a five-year period from
commencement in their role
AMP Limited shares: Ordinary AMP Limited
shares registered in the Executive KMP’s name
or a related party
AMP share rights: Granted to executives
through AMP’s employee share plans
Share rights allocated to Executive KMP are included to meet their minimum holding requirement only where future vesting is not
subject to any further performance condition (other than a continued service condition). AMP Limited shares and/or share rights
cannot be hedged. Executive KMP are not expected to purchase shares to meet the requirement. Rather, it is expected that they
would not sell any shares held (other than to cover arising tax liabilities) and that they will retain vested shares and share rights
until the minimum requirement is reached.
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4
Section
Performance and reward outcomes
4.1
Summary of 2023 outcomes
The table below illustrates AMP’s performance over the past five years and remuneration outcomes.
2019
2020
2021
2022
2023
Financial results
Profit (loss) after tax attributable to shareholders ($m)
(2,467)
Net profit after tax (underlying) ($m) 1
Cost to income ratio (%) 1
Shareholder outcomes
Total dividends paid during the year (cents per share) 2
Share price at 31 December ($)
Remuneration outcomes
Relative TSR percentile 3
LTI vesting outcome (% of grant)
Average STI received by Executive KMP
(as % of target opportunity) 4
Average STI received by Executive KMP
(as % of maximum opportunity) 4
439
66
–
1.91
–
–
46
23
177
233
76
10
1.56
–
–
–
–
(252)
280
67
–
1.01
n/a
n/a
39
20
387
184
72
–
1.31
n/a
n/a
88
44
265
196
69
5
0.93
7th
0%
73.5
36.7
1 NPAT (underlying) represents shareholder attributable net profit or loss after tax after excluding non-recurring revenue and expenses. Note,
NPAT (underlying) and associated cost to income ratio for financial years 2019–2021 are as reported and have not been restated to reflect the
removal of AMP Capital discontinued operations from NPAT (underlying).
2 Refers to dividends paid during the year and not dividends declared. Refer to note 1.5 of the 2023 Financial Report for further information.
3 No LTI grants were tested during 2021 and 2022.
4 The average STI outcome relates to Executive KMP including the CEO. Refer to section 4.3 for further information of each Executive KMP's
2023 STI outcome.
4.2
STI Performance objectives and assessment
Company and executive performance is assessed by reference to the scorecard, underpinned by five key result areas, each
which have objectives, metrics and targets that were set at the beginning of 2023, noting that the strategic objectives were
changed during the year to reflect stakeholder feedback from the AGM and ensure an overall weighting of 60% to financial
outcomes (as communicated in the 2023 Half Year Directors’ Report). Achievements against these objectives were used
by the board as one of the key inputs in determining the STI incentive pool.
l
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F
%
0
6
i
Finance
Weighting:
40%
20%
Weighted outcome:
15%
15%
Board determined
outcome:
37.6%
10%
25.0%%
NPAT
(underlying)
2022 Position:
$184m
2023 Target:
$200m
98%
2023 Outcome: $196m
End of 2022 position: $184m (as reported)
2023 Target: $200m
End of 2023 outcome: $196m (as reported)
AMP achieved an underlying NPAT equivalent to 98% achievement of target or a weighted outcome
of 19.6%. This result reflects improved underlying profit, offset by reduced AUM revenue due to the
long-term strategic simplification of Master Trust, and lower strategic partnership earnings impacted
by US real estate valuations and regulatory changes in China. Controllable costs have remained a focus,
with trajectory for further reductions in 2024.
NPAT
(statutory)
2023 Target:
$294m
2022 Position:
$387m
90%
2023 Outcome: $265m
End of 2022 position: $387m (as reported)
2023 Target: $293.5m
End of 2023 outcome: $265m (as reported)
For 2023, AMP achieved a statutory NPAT equivalent to 90% achievement of target or a weighted outcome
of 18%. The outcome tracked just below plan with NPAT challenged by higher corporate borrowing costs,
and factors impacting underlying NPAT (as outlined above).
As the 2023 statutory NPAT result includes several planned and unplanned one-off events, such as the
impacts of class actions, impairments and the gain on sale of AMP Capital and SuperConcepts, the board
has assessed the overall quality of AMP’s financial results and determined a weighted outcome of 5.4% for
this metric.
Strategy
Weighting:
40%
20%
15%
Weighted outcome: 6.8%
10%
15%
2022 Position:
9.3%
2023 Target:
9.3%
Bank ROC
0%
2023 Outcome: 7.9%
End of 2022 position: 9.3%
2023 Target: 9.3%
End of 2023 outcome: 7.9%
For 2023, Bank ROC was below the minimum threshold performance level, impacted by previously
disclosed net interest margin compression, and increased funding costs. In the second half of 2023,
the decision to further lower growth to respond to this margin pressure resulted in residential mortgage
book growth of 0.61x system for the year.
Position:
$936m
2023 Target:
$1bn
Platforms
Net
Cashflow
0%
2023 Outcome: -$443m
End of 2022 position: $936m cash inflow
2023 Target: $1bn cash inflow
End of 2023 outcome: $443m cash outflow
Despite a solid performance in Platforms and underlying NPAT improving, Platforms’ Net Cashflows were
below the minimum threshold of performance. This outcome was predominantly driven by a reduction
in discretionary flows given the economic environment.
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4.2
STI Performance objectives and assessment continued
4.2
STI Performance objectives and assessment continued
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Total
controllable
costs
2023 Target:
$760m
2022 Position:
$791m
102%
2023 Outcome: $743.8m
End of 2022 position: $791m (excluding AMP Capital)
2023 Target: $760m
End of 2023 outcome: $743.8m
AMP has remained focused on simplifying the operating model and finding efficiencies to deliver
sustainable cost reduction. For 2023, controllable costs were reduced to $743.8m, exceeding target
and delivering a weighted outcome of 6.8%. This was achieved through continued focus on achieving
efficiencies within the Advice and Master Trust businesses, despite inflation, and the impact of previously
announced stranded costs from the AMP capital transactions emerging in Group costs.
Further information on the Group Financial Performance can be found
in Business Review section of AMP’s 2023 Annual Report
Customer
40%
Weighting:
20%
15%
15%
Weighted outcome: 17.6%
10%
Improvement
in RepTrak
score
(absolute)
2022 Position:
57.2
2023 Target:
59
105%
2023 Outcome: 60.2
End of 2022 position: 57.2
2023 Target: 59.0
End of 2023 outcome: 60.2
AMP’s RepTrak score (absolute score) improved by 3 points over 2023, resulting in a weighted outcome
of 7.9%. The increase in RepTrak score was attributable to improvements across both customer and
non-customer segments.
Customer
satisfaction
score
2023 Target:
7.0
130%
2023 Outcome: 7.6
End of 2022 position: n/a – not measured in 2022
2023 Target: 7.0 (out of 10)
End of 2023 outcome: 7.6 (out of 10)
Aligned with a renewed focus to be a purpose-led business, 2023 was the first year that AMP introduced
Customer Satisfaction (prior to this AMP measured customer engagement through Net Promoter Score
(NPS)). Customer satisfaction presents an overall view of AMP customers, members and Advisers across
Bank, NZWM, Advice, Platforms and Master Trust. Significant improvement was achieved over 2023, with
a final outcome of 7.6, representing a weighted outcome of 9.7%.
People
40%
20%
Weighting:
15%
15%
10% Weighted outcome: 15.6%
2022 Position:
73
2023 Target:
73
100%
2023 Outcome: 73
End of 2022 position: 73
2023 Target: 73
End of 2023 outcome: 73
Satisfaction
Employee
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For 2023, the Employee Satisfaction target of 73 was maintained from 2022, given the level of ongoing
transformation planned. Achieving a result of 73 resulting in a weighted outcome of 7.5%, is a strong
result, noting in particular that cost-out activity and operating model changes which impacted almost
all business areas.
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4
Position:
75
2023 Target:
75
Inclusion index
95%
2023 Outcome: 74
End of 2022 position: 75
2023 Target: 75
End of 2023 outcome: 74
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AMP’s inclusion index remained stable at 74, 1 point below target resulting in a weighted outcome of
3.6%. Management remain focussed on fostering an inclusive environment, including implementing a
new Inclusion Strategy and Action plan, a renewed Policy, the mandating of inclusion learning, and
celebrating days of significance, to create an environment of belonging.
Gender
diversity
2023 Target:
40:40:20
2022 Position:
45:55
120%
2023 Outcome: 46:54
End of 2022 position: 45% (female) : 55% (male)
2023 Target: 40% (male) : 20% (any gender)
End of 2023 outcome: 46% (female) : 54% (male)
AMP’s gender diversity levels were maintained within the target of 40:40:20. Results showed an
improvement from 2022, with gender diversity targets achieved at all levels including Board, Executive
Management, Head of, Middle Management and the broader workforce.
Further information regarding diversity and inclusion can be found in AMP’s 2023 Sustainability Report
40%
Risk
20%
15%
Weighting:
15%
10%
Weighted outcome: 10.0%
Effective
management
of risks
2022 Position:
6
2023 Target:
0–1
100%
2023 Outcome: 1
End of 2022 position: Number of risks = 6
2023 Target: 0–1 risks
End of 2023 outcome: 1
Effective management of risks was in line with our target of 0-1 risks outside of risk appetite, with 1 risk
outside of risk appetite resulting in a weighted outcome of 5%. The risk outside of appetite related to a
compliance risk being addressed as a part of the ongoing Court Enforceable Undertaking (CEU) agreed
with APRA in 2019. Action plans are in place to bring this risk back within risk appetite. Progress against
the CEU is tracking well and almost near completion.
Risk culture
maturity
assessment
2022 Position:
Evolving
2023 Target:
Evolving
100%
2023 Outcome: Evolving
End of 2022 position: Evolving
2023 Target: Evolving
End of 2023 outcome: Evolving
AMP achieved a positive risk culture assessment in line with plan, resulting in a weighted outcome of
5%. This was supported through actions aligned to key focus areas, including assessment and oversight,
supporting employees to understand and embrace AMP’s purpose & values including sharing risk
culture dashboard reporting with all employees, supporting psychological safety, and recognising and
rewarding employees for demonstrating a respect for risk through AMP’s recognition platform AMPED.
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2023 Performance Assessment – Total scorecard result
75.0%
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4.2
STI Performance objectives and assessment continued
4.4
Long-term Incentive outcome
Performance rights that were awarded under the 2021 Long Term Incentive (LTI) plan and allocated in April 2021, were subject
to an RTSR performance condition measured over a three-year performance period from 1 January 2021 to 31 December 2023.
The number of performance rights that vest under the award was determined by the Board by reference to a comparison
of CAGR in AMP’s TSR relative to the CAGR in TSR to the peer group of S&P/ASX 100 financial companies excluding A-REITs
as at 1 January 2021, in line with the vesting schedule below.
Vesting Schedule
CAGR TSR performance
Proportion of LTI grant vesting
AMP’s TSR ranking below the 50th percentile of the peer group
AMP’s TSR ranking at the 50th percentile of the peer group
0%
50%
AMP’s TSR ranking between the 50th and 75th percentile of the peer group
50% plus 2% for each additional percentile
(rounded to nearest whole percentile)
AMP’s TSR ranking is at least the 75th percentile of the peer group
100%
ASX100 Financials (ex A-REITs) peer group as at 1 January 2021:
— ANZ Group Holdings Limited
— ASX Limited
— Bank of Queensland Limited
— Bendigo and Adelaide Bank Limited
— Challenger Limited
— Commonwealth Bank of Australia
— Insurance Australia Group Limited
— Macquarie Group Limited
— Magellan Financial Group Limited
— Medibank Private Limited
— National Australia Bank Limited
— QBE Insurance Group Limited
— Suncorp Group Limited
— Westpac Banking Corporation
Each Performance Right that vested following testing of the performance condition entitled the plan participants to one AMP
share. The RTSR performance condition for the Performance Rights was tested following the conclusion of the performance
period on 31 December 2023 and the results and vesting outcome are detailed below. The results were calculated by an
external provider and approved by the board after considering any risk and conduct issues in line with the remuneration
adjustment guidelines in section 5.3.
Performance Period
Performance Condition
Percentile Rank
1 January 2021 to
31 December 2023
AMP’s TSR ranking
against the S&P/ASX100
Financials (ex A-REITS)
7th percentile
% vested
0%
% lapsed
100%
Scorecard result
75%
Total Incentive
pool
75%
Incentive pool determination
The overall scorecard outcome was 75%. This result was delivered in a challenging
economic environment and is reflective of management’s continuing progress
on delivering a more streamlined and cost-efficient AMP. The board determined
an incentive pool of 75%. In arriving at a decision, the board particularly considered:
— Portfolio strategy – significant progress
— Maintaining high levels of employee
on simplifying the portfolio, repositioning
AMP’s core businesses in wealth
management and retail banking and
completing the AMP Capital divestment.
— Capital return – $483 million of capital
returned to shareholders via dividends
and on-market buybacks over 2023.
— Cost out program – in line with target,
despite high inflation and stranded
costs related to AMP’s sold businesses.
— Improving risk management and
customer satisfaction, notwithstanding
ongoing transformation and transactions.
engagement despite ongoing
disruption from transformation activity
and operating model changes.
— Continued improvement in AMP’s
reputation score, demonstrating that
AMP’s reputation is recovering.
— Resolution of two significant legacy
issues – settlement of the shareholder
class action and agreement to settle
Buyer of Last Resort (BOLR) class action.
These considerations were balanced against the overall shareholder experience over
2023. The board also considered that the Scorecard outcome of 75%, represented
37.5% of the maximum available opportunity and no other variable remuneration that
was subject to performance testing during 2023 vested and became payable.
4.3
Short-term Incentives Awarded
The following table shows the STI awarded to current and former Executive KMP for the 2023 performance year. It differs from
the statutory table in section 7.1 which is prepared according to Australian Accounting Standards.
Pro rated
target STI
opportunity 1
$'000
Total STI
outcome
awarded 2
$'000
60% to be paid
as Cash in
March 2024 3
$'000
40% to be
delivered in
share rights 3
$'000
STI awarded
as % of
pro rated
target STI
opportunity 4
%
STI awarded
as % of
pro rated
max STI
opportunity 4
%
1,715
1,286
515
650
420
412
300
453
320
364
772
180
272
192
218
514
120
181
128
146
75%
58%
70%
76%
88%
37%
29%
35%
38%
44%
2,723
1,634
1,089
Executive KMP
Alexis George
Scott Hartley
Sean O'Malley
Nicola Rimmer-Hollyman
Blair Vernon
Total STI awarded
1 Scott Hartley was eligible to participate in the 2023 STI for the portion of the year he was CEO AWM. For Blair Vernon, the prorated target STI
opportunity reflects his KMP period as CFO.
2 The STI outcome awarded is based on performance during 2023 and reflects their outcome in line with their KMP period.
3 Of the STI awarded, 60% is delivered in cash and 40% is delivered in share rights that will be granted in April 2024.
4 Represents the STI award as a percentage of the pro rated target and max STI opportunity (which is 200% of target). The average STI
received by Executive KMP was 73.5% of the target opportunity, or 36.7% of the maximum opportunity.
5 Peter Fredricson and James Georgeson were not eligible to participate in the 2023 STI.
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4.5
Transformation Incentive Award
4.6
CEO sign on award outcome
Performance rights that were awarded to Executive KMP under the 2019 Transformation Incentive (LTI) plan and allocated
in August 2019, were subject to two performance measures, with 75% of the award subject to CAGR TSR performance
condition measured against an index of ASX100 Financial Services excluding A-REITs companies over the performance
period 1 August 2019 to 15 February 2023, and the remaining 25% subject to a Risk and Control assessment.
TSR Vesting Schedule
Index Return Achieved
AMP’s CAGR TSR below 75% of the index return
AMP’s CAGR TSR at 75% of the index return
AMP’s CAGR TSR at 90% of the index return
AMP’s CAGR TSR at 100% of the index return
AMP’s CAGR TSR at 110% of the index return
Proportion of LTI grant vesting
0%
25%
50%
75%
100%
Straight-line vesting applies for performance between the thresholds above.
The Total Shareholder Return component did not vest following AMP’s share price performance relative to the index it is
measured against. Over the performance period, AMP had a CAGR TSR of -6.4% compared to the Index CAGR TSR of +1.4%.
In determining the outcome of the Risk and Control component, the board has taken into consideration a range of factors
in making its decision, including the shareholder experience and the overall performance of the organisation over the
performance period.
As such, the board has determined that both components of the award were below the minimum threshold for any vesting and
therefore the performance rights granted under this plan were lapsed.
As previously disclosed to the market in April 2021, Alexis George was provided a sign-on equity award as a part of her
appointment as CEO to compensate for remuneration foregone with her previous employer. The equity awards granted
as part of that arrangement was structured as follows:
— Four tranches of share rights subject to a continued service condition.
— Three tranches of Performance Rights subject to an absolute Total Shareholder Return (ATSR) condition.
— Three tranches of Performance Rights subject to a RTSR condition.
Further details of each tranche of performance rights can be found in table 7.4.
Each of the performance metrics was subject to the following vesting schedules, respectively:
Absolute TSR
Relative TSR
CAGR ATSR performance
Nil or Negative TSR
Positive TSR
Between positive TSR
and 8.5% CAGR
Proportion of LTI
grant vesting
CAGR TSR performance
Proportion of LTI
grant vesting
0%
50%
AMP’s TSR ranking below the 50th
percentile of the peer group
AMP’s TSR ranking at the
50th percentile of the peer group
0%
50%
50% plus 2% for each
additional percentile
(rounded to nearest
whole percentile)
AMP’s TSR ranking between the 50th
and 75th percentile of the peer group
50% plus 2% for each
additional percentile
(rounded to nearest
whole percentile)
CAGR of 8.5% or above
100%
AMP’s TSR ranking is at least the
75th percentile of the peer group
100%
ASX100 Financials (ex A-REITs) peer group was defined as follows:
— ANZ Group Holdings Limited
— ASX Limited
— Bank of Queensland Limited
— Bendigo and Adelaide Bank Limited
— Challenger Limited
— Commonwealth Bank of Australia
— Insurance Australia Group Limited
— Macquarie Group Limited
— Magellan Financial Group Limited
— Medibank Private Limited
— National Australia Bank Limited
— QBE Insurance Group Limited
— Suncorp Group Limited
— Westpac Banking Corporation
In 2023, the second tranches of the ATSR and RTSR performance rights were performance tested.
The RTSR and ATSR performance condition for tranche two of the performance rights were both tested following the
conclusion of the performance period on 22 November 2023. The results and vesting outcome are detailed below. The results
were calculated by an external provider and approved by the board after considering any risk and conduct issues in line with
the remuneration adjustment guidelines in section 5.3.
Component
Performance Period
Performance Condition
ATSR – Tranche 2
RTSR – Tranche 2
22 November 2021
to 22 November 2023
22 November 2021
to 22 November 2023
Compound annual growth
in AMP’s TSR
AMP’s TSR ranking against
the S&P/ ASX100 Financials
(ex A-REITS)
Result
-11.6%
21st percentile
% vested
% lapsed
0%
0%
100%
100%
Each Performance Right that vested following testing of the performance condition entitled the plan participants to one
AMP share.
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5
Section
Remuneration governance
5.1
Governance framework
There are a number of remuneration governance and oversight processes in place at AMP, primarily exercised through the
AMP Limited Board, subsidiary boards and the Remuneration Committee. The Remuneration Committee assists the various
boards to fulfil their remuneration obligations by developing, monitoring and assessing remuneration strategy, policies and
practices across AMP. Members of the Remuneration Committee are independent non-executive directors. More information
on the role of the Remuneration Committee can be found in the corporate governance section of AMP’s website.
The board believes that to make prudent remuneration decisions, it needs both a robust framework and the ability to exercise
judgement. Therefore, the board has adopted a remuneration adjustment framework to guide the board in determining the
appropriate remuneration outcomes. Refer to section 5.3 for further information on the remuneration adjustment guideline.
From time-to-time, the Remuneration Committee may seek external guidance or benchmarking information from independent
remuneration advisers. Any advice provided by external advisers is used as a guide and is not a substitute for consideration
of all the issues by each non-executive director of the Remuneration Committee. The Remuneration Committee did not engage
any independent remuneration advisers to provide remuneration recommendations, as defined in the Corporations Act.
The following diagram outlines AMP’s remuneration governance framework.
Remuneration governance framework
AMP Limited Board
AMP subsidiary Boards
Risk and Compliance Committee
Remuneration Committee
Assists the board with oversight of
the implementation and operation of
AMP’s risk management framework.
Makes recommendations to the Remuneration
Committee on:
— Risk-related adjustments for remuneration
outcomes.
— Risk-related adjustments for the incentive
pool.
— Risk-related matters that may require the
application of malus or clawback or in-year
reduction to incentives.
Advises the AMP Board and the boards of
AMP subsidiaries in setting and overseeing
AMP’s remuneration policy and practices.
Key responsibilities include:
— Reviewing AMP’s remuneration policy, including
effectiveness and compliance with regulatory
requirements.
— Reviewing the remuneration arrangements,
performance objectives, measures and outcomes
for executives and senior management.
— Reviewing the remuneration arrangements for
non-executive directors.
— Reviewing AMP’s remuneration disclosures;
— Overseeing all incentive plans.
— Reviewing and making recommendations in relation
to equity awards, including malus and clawback.
Management
The CEO makes recommendations to the
Remuneration Committee on the performance
and remuneration outcomes for her direct reports.
Management advises the Remuneration Committee and
provides information on remuneration related matters.
Independent remuneration
advisers
The Remuneration Committee may
engage remuneration advisers
when it needs additional information
to assist the AMP Board in making
remuneration decisions.
5.2
Risk management in remuneration
In addition to the robust risk features of the performance management framework, the board has a range of mechanisms
available to adjust remuneration and incentive outcomes to reflect behavioural, risk or compliance outcomes. The table below
summarises the range of mechanisms available and their intended operation.
Risk assessment
Risk and conduct outcomes
Malus and clawback
provisions
Board discretion
Enterprise and business unit levels
All employees
All incentive plans
The Chief Risk Officer (CRO)
has a standing agenda item
and reports at each of the
Remuneration Committee
meetings, covering the overall
assessment of risk management
at the conclusion of the
performance year as an input
to the determination of the
incentive pool.
At the conclusion of each
performance year, the Chair
of the Risk and Compliance
Committee (who is also a
member of the Remuneration
Committee) provides an
overview of the key issues
considered by the Risk and
Compliance Committee that
are likely to be relevant to the
assessment of the remuneration
outcomes for the CEO
and ExCo members by the
Remuneration Committee.
Employees’ risk
management
behaviour and conduct
is specifically considered
as part of individual
performance assessment
and in the determination
of remuneration
outcomes.
The consequence
management framework
ensures that behaviour
which does not meet
expectations is actively
and consistently
managed, throughout
the year, including
adjustments to
past, present and
future remuneration
if appropriate.
Incentive plan terms
allow the board to
adjust and lapse
(malus) unvested
equity awards or
reclaim (clawback)
vested incentives in
certain circumstances.
All deferred incentives
are subject to
a conduct and risk
review before vesting.
This applies to current
and former employees.
The board may
apply its absolute
discretion to adjust
past, present and
future remuneration,
subject to the equity
incentive plan rules
governing the plan and
in compliance with the
relevant policies.
It does this in line with
the remuneration
adjustment framework
to provide greater
consistency in
remuneration
adjustments (refer
to section 5.3 below).
The board exercises discretion to apply remuneration consequences to executives with overall accountability for matters
arising in their business units with adverse risk, customer and/or reputational impacts. There is a standing agenda item at each
Remuneration Committee for the CRO to present any risk related information the Committee should consider when making
remuneration decisions. This also gives the Remuneration Committee an opportunity to make enquiries and have unfettered
access to risk and internal audit executives. The Remuneration Committee considers both the achievement of the risk metrics
as well as a risk overview when determining the incentive pool. Before every equity vesting event, management provides
a report to the Committee to highlight if there is any reason, including risk considerations, why the Committee should exercise
its discretion to lapse the unvested equity award.
AMP has a Consequence Management Committee (CMC), which was established to ensure consistent management
of workplace conduct matters and application of AMP’s Consequence Management policy. The CMC comprises the CEO,
Chief People, Sustainability and Community Officer and Chief Risk Officer as standing members. Statistics and insights on all
conduct cases across AMP Limited are reported to the Risk and Compliance Committee on a biannual basis, following review
by the CMC. Under the consequence management framework, all substantiated cases of misconduct require the application
of a management and/or remuneration consequence. Where there is a recommendation from People, Sustainability and
Community (and as endorsed by the CMC) to apply malus or clawback to past remuneration as a part of the recommended
remuneration consequence, submissions are made to the Remuneration Committee to exercise its discretion to lapse the
unvested equity award.
During the year, there was no application of the Consequence Management policy in relation to 2023 remuneration outcomes
for any of AMP’s current executives.
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5.3
Remuneration adjustment guidelines
The board has adopted a remuneration adjustment framework to provide guidance in exercising discretion related to past,
present and future remuneration and to provide greater consistency in remuneration adjustments. The framework is considered
at each remuneration decision point to identify whether there have been any material conduct or risk events that have impacted
on shareholder experience, the reputation of the company or led to disciplinary action from our regulators.
This tool is intended to help the AMP Board in making potential downward adjustments to variable remuneration. It is not
intended to be used as a prescriptive or formulaic decision tree, as board judgement will always need to be applied according
to the facts and circumstances of a particular situation. Whilst the framework is designed to deal with material risk and conduct
events, the board can also exercise its discretion to apply positive adjustments if appropriate.
The following chart is an example of the types of qualitative and quantitative indicators the board may consider in exercising
discretion in relation to material conduct and risk events.
Considerations for adjusting remuneration
Is the remuneration outcome on an individual or cohort basis in line with the actual values and original intent?
Qualitative indicators
Quantitative indicators
Customer and people
Has there been a potential breakdown of trust with AMP’s
employees, customers, fund beneficiaries or members of the
community or operated in a way that is contrary to our
stated values?
Reputation, Customer
Satisfaction or Employee
Satisfaction scores
Reputation
Has there been unexpected widespread media coverage about
AMP that has impacted the reputation or brand?
Reputation Score,
Shareholder experience
Risk
Has there been a material deterioration in the risk culture or profile
of the company?
Unacceptable level
of risk appetite
Finance
Have we behaved in a way that was not fiscally responsible and
there was an impact on our prudential standing or reputation?
Capital adequacy,
credit rating
Potential adjusting event identified
Remuneration Committee
Board decision
Decision making
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6
Section
Non-executive director fees and shareholding requirements
6.1
Non-executive director fees
The Remuneration Committee is responsible for reviewing non-executive director (NED) fees for AMP Limited and its main
subsidiaries. In reviewing these fees, the Remuneration Committee has regard to a range of factors including the complexity
of AMP’s operations and those of its main subsidiaries, fees paid to board members of other Australian corporations of a similar
size and complexity, and the responsibilities and workload requirements of each board and committee. The Remuneration
Committee obtains market data and recommends any proposed fee changes to the AMP Limited Board for approval.
A review of NED fees for the AMP Limited Board (which also include fees for all AMP Bank Board duties and obligations)
was conducted in line with regular annual NED fee review practice. This included a reassessment and adjustment of the
remuneration benchmark group to better reflect the relative size and complexity by removing the big five banks, foreign
organisations listed on the ASX and organisations that do not directly compete in the same industry/sector as AMP
(e.g., insurance companies) . Based on market data analysis, the board determined that current fees are competitive
to companies of comparable size, complexity and regulatory supervision. Noting that total NED fees paid have reduced
by more than 43% since 2019, it was assessed that for the time being, maintaining fees at slightly above the median of the
financial services sector (excluding ANZ, CBA, Macquarie, NAB, Westpac and others) was justified due to ongoing time
demands on the boards of AMP Limited and AMP Bank.
During 2023, the board met 20 times and committees and advisory groups met an additional total of 29 times and dealt
with ongoing legacy matters, including those related to AMP Capital sales completion, class action process and settlements,
plus ongoing interactions related to capital returns and regulatory matters.
The total remuneration earned by AMP Limited NEDs during 2023 (including all AMP Bank duties and obligations) was $2.157m,
which represents 46.7% of the 2023 annual fee pool.
The current members and role of each standing committee as at the date of this statement are set out in the Corporate
governance statement.
The following table shows the annual NED fees for the board and permanent committees of AMP Limited and its main
subsidiaries for 2023.
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AMP Limited
Board
Audit Committee
Risk and Compliance Committee
Remuneration Committee
Nomination Committee
ESG Advisory Group
Technology Transformation Advisory Group
AMP Bank
Board
Audit Committee
Risk and Compliance Committee
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Chair base fee 1
2023 3
$
Member base fee 2
2023 3
$
561,000
204,000
46,750
46,750
46,750
nil
46,750
46,750
nil
nil
nil
21,590
21,590
21,590
nil
21,590
21,590
nil
nil
nil
Adjust remuneration
Adjustment to be proportionate to the severity of the risk and conduct outcome
1 The Chair of AMP Limited does not receive separate committee fees.
2 No additional fees are paid to NEDs for their membership or for chairing the AMP Bank Limited Board.
3 There was a restructure of the AMP Limited and Bank Board committee memberships on 1 October 2022 to incorporate the establishment of the
ESG & Sustainability and Technology Transformation Advisory Groups.
Reduction or
cancellation of
cash payments
Malus applied
to existing equity
awards on foot
Clawback of
already paid/
released equity
awards
Downward
adjustment
to in period
remuneration
Pre grant
adjustment to
quantum of
future LTI grant
68
Remuneration report
6.2
Non-executive director minimum shareholding
The minimum shareholding requirement (MSR) for NEDs is set out in AMP’s minimum shareholding policy. Under this policy,
NEDs are required to accumulate and hold a minimum value of AMP shares to ensure their interests are closely aligned with
the long-term interests of AMP shareholders. For the purposes of determining whether the minimum shareholding has been met,
the value of each share held by a NED will be the share price at the time the share was acquired. As at the date of this report,
these minimum values are:
— AMP Limited Chair: $561,000 – the equivalent of the AMP Limited Chair base fee.
— Other AMP Limited NEDs: $204,000 – the equivalent of the AMP Limited NED base fee.
NEDs are ordinarily expected to achieve these levels within four years of their appointment, see section 7.6. The policy expects
NEDs to apply at least 25% of their base fee each year to acquire AMP shares until the MSR has been met. NEDs are also
encouraged to increase their ownership over their tenure. Any such acquisition of AMP shares may only occur when permitted
to do so in accordance with AMP’s Trading Policy. Between 2019 and 2022, opportunities for NEDs to acquire shares during
the trading windows in accordance with AMP’s Trading Policy were limited due to the ongoing transactions, including the sale
of AMP Life, portfolio review and sales of AMP Capital businesses.
Since then, NEDs have been able to increase their share ownership when not in possession of inside information.
In addition, as part of an overall update and to provide greater opportunity for NEDs to buy AMP shares, AMP’s Trading
Policy was updated in 2023. These updates saw the policy transition from trading windows to blackout periods to permit NEDs
and other designated persons to trade in AMP shares outside of blackout windows in accordance with the trading policy and
subject to any inside information.
As at the date of this report, all non-executive Directors have either met their minimum holding requirement or are on target
to do so.
7
Section
Statutory tables
The following disclosures provide additional information and/or are required under the Corporations Act. This includes the
2023 Executive KMP remuneration that is prepared according to Australian Accounting Standards.
7.1
Statutory remuneration disclosure
Statutory remuneration represents the accounting expense of remuneration in the financial year. It includes fixed remuneration,
cash STI, the fair value amortisation expense of equity awards granted, long service leave entitlements and insurance,
reflective of the relevant KMP period.
Short-term employee benefits
Post-
employment
benefits
Share-
based
payments 4
Long-term
benefits
Cash
STI 2
$'000
Other
short-term
benefits 3
$'000
Super-
annuation
benefits
$'000
Rights
and
options
$'000
Other 5
$'000
Termination
benefits 6
$'000
Executive KMP
Alexis George
Sean O'Malley
Nicola Rimmer-
Hollyman
Blair Vernon 8, 9
Year
2023
2022
2023
2022
2023
2022
2023
2022
Former Executive KMP
Peter Fredricson 8
James
Georgeson 8
Scott Hartley 8
Total
2023
2022
2023
2022
2023
2022
Cash
salary 1
$'000
1,670
1,678
600
565
539
455
448
–
281
–
12
724
514
871
2023
4,064
2022
4,293
772
912
272
294
192
202
218
–
–
–
–
396
180
432
1,634
2,236
18
25
(10)
36
(2)
22
70
–
17
–
35
14
27
5
155
102
29
27
29
26
57
52
15
1,514
1,360
414
467
236
203
307
–
–
13
–
2
26
5
28
–
–
155
1,756
420
583
150
3,046
159
4,369
7
5
22
27
10
13
15
–
–
–
(86)
12
(4)
3
(36)
60
Total 7
$'000
4,010
4,007
1,327
1,415
1,032
947
1,073
–
367
–
270
2,928
1,367
1,922
9,446
–
–
–
–
56
–
152
–
225
–
433
–
11,219
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1 Cash salary is inclusive of base salary and short-term compensated absences, less superannuation deductions.
2 Cash STI reflects 60% of STI award outcome for the 2023 performance year for Executive KMP.
3 Other short-term benefits include non-monetary benefits and any related FBT exempt benefits and FBT payable benefits, for example car
parking and leasing arrangements, insurances, professional memberships and subscriptions, vouchers and the net change in annual leave
accrued. For Blair Vernon, the amount also includes a one-off relocation allowance and the cost of tax advice associated with his relocation
from New Zealand to Australia.
4 The values in the table reflect the current year accounting expense for all share rights and performance rights outstanding at any point during
the year, as required under the Australian Accounting Standards. The cost of the award is amortised at the fair value over the vesting period and
updated at each reporting period for changes in the number of instruments that are expected to vest. For Peter Fredricson, the value includes
the recognition and reversal of expenses for awards that have lapsed. For Scott Hartley and James Georgeson, the value was adjusted to reflect
the acceleration of accounting expense that was expected to be amortised in future periods as required by the Australia Accounting Standards
as a result of their employment ending with AMP.
5 Other long-term benefits represent the net change in long service leave accrued.
6 For Peter Fredricson, termination benefits relates to four weeks' paid in lieu of notice. For James Georgeson, termination benefits relates
to almost 11 weeks' paid in lieu of notice. For Scott Hartley, termination benefits relates to a redundancy payment of 13 weeks' severance pay
in line with AMP's Redundancy, Redeployment and Retrenchment Policy. All termination benefits provided were in compliance with Part 2D.2,
Division 2 of the Corporations Act.
7 The total in this table for 2022 of $11.219 million is different to the total for 2022 in the 2022 Remuneration Report as it does not include
$668 thousand for David Cullen, $666 thousand for Shawn Johnson and $446 thousand for Rebecca Nash who were derecognised as KMP
part way through 2023 and reported in the 2022 Remuneration Report. It also does not include the negative amount of $893 thousand for
Phil Pakes (former Chief Risk Offer) who was also reported in the 2022 Remuneration Report.
8 For Blair Vernon, Peter Fredricson, James Georgeson and Scott Hartley, the amounts disclosed in this table reflect their periods as KMP.
9 Upon Blair Vernon's appointment to the CFO role, his fixed remuneration package reflects non-monetary benefits he forfeited upon
relocating from New Zealand to Australia and compensates for the different taxation rates between the two tax jurisdictions.
7.2
Loans and other transactions
AMP provides home loans to Australians to help them buy, build or renovate properties. The table below includes loans offered
to executives in the ordinary course of business and on equivalent terms to those offered to other employees and shareholders.
The table below also includes other borrowing facilities offered to employees from time-to-time as a part of our global mobility
arrangements (see footnotes for further information).
The following table shows loan balances that exceed $100,000 held by current and former Executive KMP during the reporting
year. No Executive KMP held a loan balance of less than $100,000.
KMP
Executive KMP
Alexis George
Sean O’Malley
Blair Vernon 1
Former Executive KMP
James Georgeson
Scott Hartley
Total
(incl. related parties) 2
Balance on
1 Jan 2023 Write downs
$’000
$’000
Net advances
(repayments)
$’000
Balance on
31 Dec 2023
$’000
charged
$’000
not charged
$’000
Interest
680
1,550
–
911
1,024
4,165
–
–
–
–
–
–
(13)
(126)
26
1,139
(252)
667
1,424
26
2,050
772
38
76
–
67
18
774
4,939
199
–
–
2
–
–
–
Highest
balance
during the
year
$’000
681
1,574
106
3,008
1,024
6,393
1 Blair Vernon was granted an interest-free loan under a tax protection agreement to assist with his personal Australian tax liability as a result
of working between New Zealand and Australia in the role of Group Executive, Transformation and New Zealand Wealth Management. The
deemed interest and associated fringe benefits tax has been recorded as a non-monetary benefit in section 7.1 of the remuneration report.
2 Five Executive KMP hold loans.
Other transactions
Executive KMP and their related parties may have access to AMP products and these products are provided to executives
within normal employee terms and conditions. The products may include personal banking with AMP bank and/or financial
investment services.
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7.3
Executive shares and share rights holding
The following table shows the number of shares and share rights held by Executive KMP and/or their related parties during 2023.
A related party is typically a family member of the executive and/or is an entity in which the executive has direct or indirect
control. The definition of units includes AMP Limited shares and share rights which are not subject to performance conditions.
Shares and Share Right Holdings
MSR Progress 6
Name
Type
Executive KMP
Balance at
1 Jan 2023
Granted 1
Exercised/
released 2
Forfeited/
lapsed
Other
transactions
Alexis
George
Total
Sean
O'Malley
Total
Nicola
Rimmer-
Hollyman
Total
Blair
Vernon 5
Shares
1,476,929
–
228,538
Share rights
449,051
444,378
(228,538)
1,925,980
444,378
–
Shares
128,019
–
87,187
Share rights
332,758
143,252
(87,187)
460,777
143,252
Shares
11,250
–
Share rights
272,924
111,093
284,174
111,093
Shares
339,682
Share rights
628,129
–
–
–
–
–
–
–
145,312
–
–
–
–
Total
967,811
Former Executive KMP
Shares
282,754
James
Georgeson 5
Total
Peter
Fredricson 5
Total
Scott
Hartley 5
Total
Share rights
464,678
192,952
(145,312)
747,432
192,952
Shares
Share rights
–
–
–
Shares
6,394
–
–
–
–
–
–
–
–
160,937
Share rights
321,874
210,495
(160,937)
328,268
210,495
–
Balance
on 31 Dec
2023 3
Total Value
on 31 Dec
2023 per
the MSR 4
Requirement
per the MSR 4
1,705,467
$3,430,000
664,891
2,370,358
$2,204,433
215,206
388,823
604,029
$561,747
11,250
384,017
395,267
$367,598
339,682
628,129
967,811
$900,064
by
1 August
2026
$650,000
by
14 November
2026
$600,000
by
12 February
2027
$925,000
by
5 August
2025
428,066
512,318
940,384
0
0
–
167,331
371,432
538,763
n/a
n/a
n/a
n/a
n/a
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Relates to share rights awarded as part of the 2022 STI deferral on 1 April 2023, with a fair values of $1.02 for Tranche 1, $0.97 for Tranche 2
and $0.92 for Tranche 3.
2 A portion of share rights granted to Alexis George as part of her sign-on award on 2 August 2021 vested and was exercised to AMP Limited
shares on 22 November 2023 at a market price of $0.87 per share. For James Georgeson, Sean O'Malley and Blair Vernon, Share Rights
exercised relates to the 2020 STI deferral that vested on 17 February 2023 at a market price of $1.32.
3 There are no share rights held by any KMP’s related parties and no share rights held indirectly or beneficially by our KMP. As at 31 December 2023,
there were no share rights vested, or vested and exercisable or vested and unexercisable. No amount is payable by the Executive KMP on grant,
vesting or exercise of their share rights. Any share rights that vest following the end of the vesting period will be automatically exercised.
4 We assess compliance with our minimum shareholding requirement (MSR) each year. The table above summarises the position of each Executive
KMP as at 31 December 2023 against the requirement at the reporting date. The total value of each holding was calculated on 31 December
2023 using a closing price of $0.93.
5 The opening balance shown for Blair Vernon and the closing balances shown for Peter Fredricson, James Georgeson and Scott Hartley
are reflective of their holdings on the respective dates they became or ceased KMP, respectively.
72
Remuneration report
7.4
Executive performance rights holdings
7.4
Executive performance rights holdings continued
The following table shows the performance rights which were granted, exercised or lapsed during 2023.
Grant date
Performance
measure
Fair
value
per
right
Holding at
1 Jan 2023
Granted 1
Vested 2
Lapsed/
cancelled 3
Held on
31 Dec 2023 4
Rights
exercised
to AMP
Limited
shares
Executive KMP
Alexis
George
Total
Sean
O'Malley
Total
Nicola
Rimmer-
Hollyman
Total
9-Aug-21 Absolute TSR
0.62
511,702
9-Aug-21
Relative TSR
0.61
1,535,158
30-May-22
Relative TSR
0.59
1,818,278
–
–
–
1-Apr-23
Relative TSR
0.44
1-Apr-23 Adjusted EPS
1-Apr-23
Reputation
0.92
0.92
–
–
–
438,715
438,715
376,042
–
–
–
–
–
–
(287,154)
224,548
(861,490)
673,668
–
–
–
–
1,818,278
438,715
438,715
376,042
3,865,138
1,253,472
–
(1,148,644)
3,969,966
12-Sep-19 CAGR of TSR
1.21
552,486
–
30-May-22
Relative TSR
0.59
636,132
1-Apr-23
Relative TSR
0.44
1-Apr-23 Adjusted EPS
1-Apr-23
Reputation
0.92
0.92
–
–
–
166,277
166,277
142,523
1,188,618
475,077
12-Sep-19 CAGR of TSR
1.21
276,243
–
30-May-22
Relative TSR
0.59
318,066
1-Apr-23
Relative TSR
0.44
1-Apr-23 Adjusted EPS
1-Apr-23
Reputation
0.92
0.92
–
–
–
107,440
107,441
92,092
594,309
306,973
Blair Vernon 5
1-Jan-21
Relative TSR
0.81
406,161
30-May-22
Relative TSR
0.59
791,631
1-Apr-23
Relative TSR
0.44
186,517
1-Apr-23 Adjusted EPS
1-Apr-23
Reputation
0.92
0.92
186,517
159,871
1,730,697
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(552,486)
–
–
–
–
–
636,132
166,277
166,277
142,523
(552,486)
1,111,209
(276,243)
–
–
–
–
–
318,066
107,440
107,441
92,092
(276,243)
625,039
(406,161)
–
–
–
–
–
791,631
186,517
186,517
159,871
(406,161)
1,324,536
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Relates to the 2023 LTI plan. Refer to section 3.2 for further information.
2 During the 2023 financial year, no long term incentive performance rights vested.
3 Performance Rights granted under the 2019 Transformation Incentive Plan (with a grant date of 12 September 2019) lapsed after the minimum
threshold for any vesting was not satisfied. Performance Rights granted under the 2021 LTI plan (with a grant date of 1 January 2021) lapsed
after the minimum threshold for any vesting was not satisfied. For Alexis George (CEO), Performance Rights with a grant date of 9 August 2021
were performance tested on 22 November 2023 and lapsed after the minimum ATSR and RTSR thresholds for any vesting was not satisfied.
Refer to section 4 for further information.
4 There are no options or performance rights held by any KMP’s related parties and no options or performance rights held indirectly
or beneficially by our KMP. As at 31 December 2023, there were no performance rights vested, or vested and exercisable or vested and
unexercisable. No amount is payable by the Executive KMP on grant, vesting or exercise of their performance rights. Any performance rights
that vest following the testing of the performance condition will be automatically exercised and any performance rights that do not vest
following the performance testing will lapse (and expire) at that time.
5 The opening balances shown for Blair Vernon reflects his holding on the date he became KMP. Refer to Section 2.1 for further information.
Grant date
Performance
measure
Fair
value
per
right
Former Executive KMP
Holding at
1 Jan 2023
Granted 1
Vested 2
Lapsed/
cancelled 3
Held on
31 Dec 2023 4
Rights
exercised
to AMP
Limited
shares
Peter
Fredricson 5
Total
James
Georgeson 5
Total
Scott
Hartley 5
1-Apr-23
Relative TSR
0.44
1-Apr-23 Adjusted EPS
1-Apr-23
Reputation
0.92
0.92
–
–
–
–
191,858
191,858
164,450
548,166
12-Sep-19 CAGR of TSR
1.21
1,657,458
1-Jan-21
Relative TSR
0.81
454,821
30-May-22
Relative TSR
0.59
795,165
1-Jan-21
Relative TSR
0.81
545,785
30-May-22
Relative TSR
0.59
954,198
2,907,444
–
–
–
–
–
–
1-Apr-23
Relative TSR
0.44
1-Apr-23
Adj EPS
1-Apr-23
Reputation
0.92
0.92
–
–
–
230,229
230,229
197,341
Total
1,499,983
657,799
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(191,858)
(191,858)
(164,450)
(548,166)
(1,657,458)
(454,821)
–
–
–
–
–
–
(354,052)
441,113
(2,466,331)
441,113
(545,785)
–
(318,646)
635,552
(153,556)
(153,556)
(131,621)
76,673
76,673
65,720
(1,303,164)
854,618
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Relates to the 2023 LTI plan. Refer to section 3.2 for further information.
2 During the 2023 financial year, no long term incentive performance rights vested.
3 Performance Rights granted under the 2019 Transformation Incentive Plan (with a grant date of 12 September 2019) lapsed after the minimum
threshold for any vesting was not satisfied. Performance Rights granted under the 2021 LTI plan (with a grant date of 1 January 2021) lapsed
after the minimum threshold for any vesting was not satisfied. For Alexis George (CEO), Performance Rights with a grant date of 9 August 2021
were performance tested on 22 November 2023 and lapsed after the minimum ATSR and RTSR thresholds for any vesting was not satisfied.
Refer to section 4 for further information.
4 There are no options or performance rights held by any KMP’s related parties and no options or performance rights held indirectly
or beneficially by our KMP. As at 31 December 2023, there were no performance rights vested, or vested and exercisable or vested and
unexercisable. No amount is payable by the Executive KMP on grant, vesting or exercise of their performance rights. Any performance rights
that vest following the testing of the performance condition will be automatically exercised and any performance rights that do not vest
following the performance testing will lapse (and expire) at that time.
5 For Peter Fredricson, James Georgeson and Scott Harley in the closing balance reflects the dates they ceased to be KMPs. Refer to Section 2.1
for further information.
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74
Remuneration report
7.5
Non-executive director remuneration
7.6
Securities held by non-executive directors
The following table shows the remuneration earned by AMP NEDs for 2023.
NED
Debra Hazelton
Andrew Best
Rahoul Chowdry
Mike Hirst
Kathryn McKenzie
Michael Sammells
Andrea Slattery
Total 4
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Short-term benefits
Post-employment
benefits
Board and
committee fees
$’000
Additional board
duties 1
$’000
Non-monetary
benefits 2
$’000
Superannuation 3
$’000
539
536
207
111
246
264
267
257
185
228
246
329
220
255
1,910
1,980
–
–
13
5
–
–
11
5
23
12
14
13
31
19
92
54
–
–
–
–
–
–
–
–
–
–
–
–
2
–
2
–
22
25
24
12
26
24
5
13
22
24
26
23
27
27
152
148
Total
$’000
561
561
244
128
272
288
283
275
230
264
286
365
280
301
2,156
2,182
1 Additional work and attendance at Technology Transformation and ESG & Sustainability Advisory Groups. The Advisory Groups were
dissolved in 2023 after the board determined that they had achieved the key objectives set on their formation. The dissolution of the Advisory
Groups was completed on 31 August 2023.
2 Non-monetary benefits consist of related party travel, gifts on compassionate grounds and the associated fringe benefits tax.
3 Superannuation contributions have been disclosed separately in this table but are included in the base NED fees disclosed elsewhere in this report.
4 The total in this table for 2022 of $2.182 million is different to the total for 2022 in the 2022 Remuneration Report as it does not include $82 thousand
for former non-executive director John O’Sullivan.
The following table details the shareholdings and movements in those shareholdings in AMP Limited held directly, indirectly
or beneficially by NEDs or their related parties during the year and as at 31 December 2023. For this purpose, a NED’s related
parties are their close family members (as defined in the applicable accounting standard) and any entities over which the NED
(or a close family member) has control, joint control or significant influence (whether direct or indirect).
NED
Debra Hazelton
Andrew Best 3
Rahoul Chowdry
Michael Hirst
Kathryn McKenzie 4
Michael Sammells 5
Andrea Slattery
Balance on
1 Jan 2023
#
Shares acquired
during the year
#
Shares disposed
during the year
#
Balance on
31 Dec 2023 1
#
400,285
100,000
100,000
200000
198,000
120,000
203,975
–
53,712
–
–
20,000
50,000
–
–
–
–
–
–
–
–
400,285
153,712
100,000
200,000
218,000
170,000
203,975
Value on
31 Dec 2023
per the MSR 2
$
519,938
167,708
205,000
222,950
237,551
203,524
296,578
1 As at 31 December 2023 and the date of this report, each of the current NEDs held a ‘relevant interest’ (as defined in the Corporations Act 2001)
in the number of AMP shares disclosed above for that NED.
2 The AMP Limited Chair has a minimum requirement of $561,000 (equivalent of the AMP Limited Chair base fee) and the other AMP Limited
NEDs have a minimum requirement of $204,000 (equivalent of the AMP Limited NED base fee). The total value of each holding was calculated
as at 31 December 2023 using purchase price (per the Non-Executive Director Shareholding Policy, found in Section 6.2).
3 Andrew Best purchased 50,000 AMP Limited shares on 20 February 2023 at a market price of $1.0975 per share and 3,712 AMP Limited Shares
were issued on 3 April 2023 under AMP's Dividend Reinvestment Plan.
4 Kathryn McKenzie purchased 20,000 AMP Limited shares on 5 April 2023 at a market price of $1.0925 per share.
5 Michael Sammells purchased 50,000 AMP Limited shares on 22 February 2023 at a market price of $1.0948 per share.
75
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Directors’ report
for the year ended 31 December 2023
Rounding
In accordance with the Australian Securities and Investments Commission Corporations Instrument 2016/191, amounts in this
directors’ report and the accompanying financial report have been rounded off to the nearest million Australian dollars,
unless stated otherwise.
Non-audit services
The Audit Committee has reviewed details of the amounts paid or payable to the auditor for non-audit services provided
to the AMP group during the year ended 31 December 2023, by the company’s auditor, EY.
The directors are satisfied that the provision of those non-audit services by the auditor is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001 and did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
— all non-audit assignments were approved by the Chief Financial Officer (CFO), or his nominated delegate, or the Chair
of the Audit Committee;
— no non-audit assignments were carried out which were specifically excluded by the AMP Charter of Audit Independence;
and
— the proportion of non-audit fees to audit fees paid to EY, as disclosed in note 6.5 to the financial report is not considered
significant enough to compromise EY’s independence or cause a perception of compromise.
Signed in accordance with a resolution of the directors.
Debra Hazelton
Chair
Alexis George
Chief Executive Officer and Managing Director
Sydney, 14 February 2024
76
Remuneration report
8
Section
Looking forward to 2024
Following the 2023 AGM, where AMP received a ‘first strike’ against the adoption of its 2022 Remuneration Report, the board
sought feedback from shareholders, their representatives and proxy advisors on the matter of remuneration, and we took
action to address their key concerns (refer to section 1 for further information). As many of these changes applied to 2023,
the remuneration framework for 2024 remains largely unchanged. Furthermore, we do not anticipate any fixed remuneration
increases for the CEO and other Executive KMP (unless there is a change in the scope of the role).
The 2024 scorecard is consistent with 2023, other than the introduction of the new objective to focus on the Master Trust
and KiwiSaver cashflows (which replaces Bank ROC). This new objective and measure for 2024 is introduced to demonstrate
a renewed focus on the performance and strategic contributions of our retained businesses. Whilst Bank ROC remains a key
focus for management, the overall Bank returns continue to contribute to AMP’s NPAT on both a statutory and underlying basis.
The 2024 Scorecard seeks to continue to strike the right balance of financial and non-financial metrics to ensure management’s
alignment with shareholders’ interests, while maintaining a material weighting to non-financial metrics, in line with the
requirements of APRA’s prudential standard CPS 511.
Key result areas
Objectives
Metric
2024 SCORECARD
Financially aligned (60%)
Profitability
WEIGHTING
Deliver profitable returns
AMP Net profit after tax (statutory)
Deliver sustainable growth
AMP Net profit after tax (underlying)
30%
Strategy
WEIGHTING
Grow the Platforms business
Platforms net cashflows
Master Trust and KiwiSaver cashflows
30%
Simplify the business
Net YoY improvements on Master Trust
& New Zealand Wealth Management
net cashflows
AMP total controllable costs
Non-financial (40%)
Customer
WEIGHTING
Deliver to our customers
AMP customer satisfaction
10%
People
WEIGHTING
10%
Deliver an inclusive high-performance
culture
AMP employee satisfaction
AMP inclusion index
Reputation
WEIGHTING
Deliver a positive reputation
AMP absolute RepTrak
10%
Risk
WEIGHTING
Effective risk management
Deliver within AMP risk appetite
10%
100%
Deliver a culture that respects risk
Risk culture maturity assessment
The overall AMP performance scorecard outcome is subject to board
discretion and a risk overview, and is one aspect the board considers
in assessing overall performance and determining the incentive pool
for STI outcomes
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78
Auditor’s independence declaration
to the directors of AMP Limited
Financial report
for the year ended 31 December 2023
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
As lead auditor for the audit of the financial report of AMP Limited for the financial year ended 31 December 2023,
I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AMP Limited and the entities it controlled during the financial year.
Ernst & Young
Sarah Lowe
Partner
14 February 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TABLE OF CONTENTS
Main statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
About this report
Understanding the AMP financial report
Section 1:
Results for the year
Basis of consolidation
Material accounting policies
Critical judgements and estimates
1.1
Segment performance
1.2 Other operating expenses
1.3 Earnings per share
1.4 Taxes
1.5 Dividends
Section 2:
2.1
Loans and advances
Loans and advances,
investments, intangibles and
working capital
2.2
Investments in other financial assets and liabilities
2.3
Intangibles
2.4 Other assets
2.5 Receivables
2.6 Payables
2.7 Fair value information
Section 3:
Capital structure and
financial risk management
3.1
Contributed equity
3.2
Interest-bearing liabilities
3.3 Financial risk management
3.4 Derivatives and hedge accounting
3.5 Capital management
Section 4:
Employee disclosures
4.1
Defined benefit plans
4.2 Share-based payments
Section 5:
Group entities
Section 6:
Other disclosures
Directors’ declaration
Independent Auditor’s Report
5.1
Controlled entities
5.2 Discontinued operations
5.3
Investments in associates
5.4 Parent entity information
5.5 Related party disclosures
6.1
Notes to Consolidated statement of cash flows
6.2 Commitments
6.3 Right of use assets and lease liabilities
6.4 Provisions and contingent liabilities
6.5 Auditor’s remuneration
6.6 New accounting standards
6.7 Events occurring after reporting date
80
81
82
83
85
86
87
87
88
88
92
93
94
97
98
101
103
104
105
105
106
110
111
112
119
121
123
127
132
133
134
135
137
139
140
140
141
144
145
145
146
147
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80
Consolidated income statement
for the year ended 31 December 2023
Consolidated statement of comprehensive income
for the year ended 31 December 2023
Fee revenue
Interest income using the effective interest method
Other investment gains
Share of profit from associates
Movement in guarantee liabilities
Other income
Total revenue
Fee and commission expenses
Staff and related expenses
Finance costs
Other operating expenses
Other investment losses
Total expenses
Loss before tax
Income tax benefit
Profit after tax from continuing operations
Profit after tax from discontinued operations
Profit for the year
Earnings per share
Basic
Diluted
Profit per share from continuing operations
Basic
Diluted
Note
1.1(c)
5.3
1.1(c)
1.2
1.4(a)
5.2
1.3
1.3
1.3
1.3
2023
$m
1,372
1,401
31
75
32
65
2022 1
$m
1,402
803
–
80
21
33
2,976
2,339
(684)
(581)
(1,189)
(592)
–
(3,046)
(70)
89
19
246
265
cents
9.3
9.1
0.7
0.6
(689)
(589)
(591)
(526)
(1)
(2,396)
(57)
58
1
386
387
cents
12.0
11.9
–
–
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
81
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Note
2023
$m
19
2022 1
$m
1
81
(24)
(1)
–
56
(69)
21
(124)
37
(135)
4
4
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(12)
4
(8)
(83)
(64)
246
(7)
239
175
(229)
69
(1)
–
(161)
338
(101)
(14)
4
227
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1
1
(1)
–
(1)
89
90
386
(12)
374
464
Profit after tax from continuing operations
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Fair value reserve
— net gain/(loss) on fair value asset reserve
— tax effect on fair value asset reserve (gain)/loss
— net amount transferred to profit or loss for the year
— tax effect on amount transferred to profit or loss for the year
Cash flow hedges
— net (loss)/gain on cash flow hedges
— tax effect on cash flow hedge loss/(gain)
— net amount transferred to profit or loss for the year
— tax effect on amount transferred to profit or loss for the year
Translation of foreign operations and revaluation of hedge of net investments
Items that will not be reclassified subsequently to profit or loss
Fair value reserve
Defined benefit plans
— actuarial losses
— tax effect on actuarial losses
Other comprehensive (loss)/income for the year from continuing operations
Total comprehensive (loss)/income for the year from continuing operations
Profit for the year from discontinued operations
Other comprehensive loss for the year from discontinued operations
Total comprehensive income for the year from discontinued operations
Total comprehensive income for the year
4.1(a)
5.2(b)
5.2(b)
5.2(b)
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
82
Consolidated statement of financial position
as at 31 December 2023
Consolidated statement of changes in equity
for the year ended 31 December 2023
Assets
Cash and cash equivalents
Receivables
Investments in other financial assets
Current tax assets
Assets held for sale 1
Loans and advances
Investments in associates
Right of use assets
Deferred tax assets
Intangibles
Other assets
Defined benefit plan asset
Total assets
Liabilities
Payables
Current tax liabilities
Employee benefits
Other financial liabilities
Liabilities held for sale 1
Provisions
Interest-bearing liabilities
Lease liabilities
Deferred tax liabilities
Guarantee liabilities
Defined benefit plan liability
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
Note
2.5
2.2
2.1(a)
5.3
6.3(a)
1.4(c)
2.3
2.4
4.1(a)
2.6
2.2
6.4
3.2
6.3(b)
1.4(c)
4.1(a)
3.1
2023
$m
1,440
426
5,368
83
–
2022
$m
1,816
405
5,825
76
746
24,530
24,080
803
329
640
209
48
–
771
396
556
198
65
12
33,876
34,946
185
23
140
179
–
508
28,382
536
16
32
1
209
57
178
294
140
297
28,962
569
5
64
–
30,002
30,775
3,874
4,171
4,664
239
(1,029)
3,874
5,002
297
(1,128)
4,171
1 Assets and liabilities held for sale as at 31 December 2022 included AMP Capital's real estate and infrastructure equity businesses.
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Note
Cash flows from operating activities
Cash receipts in the course of operations
Interest received
Dividends and distributions received
Cash payments in the course of operations
Net movement in loans and advances
Net movement in deposits from customers
Finance costs
Income tax benefit received
Net cash (used in)/provided by operating activities
6.1
Cash flows from investing activities
Net proceeds/(payments) from sale or acquisition of:
— investments in financial assets
— operating and intangible assets
— AMP Capital and SMSF businesses
— Resolution Life Non-Operating Holding Company, AMP Capital's Global Equities
and Fixed Income (GEFI) business and Infrastructure Debt platform
— other operating controlled entities and investments in associates accounted
for using the equity method
Payments for loan book acquisition
2023
$m
1,419
1,368
32
(1,907)
(456)
557
(1,138)
20
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373
(32)
910
–
–
–
2022
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(1,605)
2,947
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(1,782)
(30)
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(434)
Net cash provided by/(used in) investing activities
1,251
(1,325)
Cash flows from financing activities
Net movement in borrowings – banking operations
Net movement in borrowings – non-banking operations
Share buy-backs
Purchase of shares relating to share-based payments arrangements
Payments for the principal portion of lease liabilities
Dividends paid
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year 1
Cash and cash equivalents prior to deconsolidation and transfers
Cash and cash equivalents deconsolidated
Cash and cash equivalents at the end of the year
Cash and cash equivalents classified as assets held for sale
Cash and cash equivalents per Consolidated statement of financial position
(728)
(486)
(338)
(5)
(35)
(145)
(1,737)
(591)
2,031
1,440
–
1,440
–
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243
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(267)
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(873)
2,911
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1 Cash and cash equivalents at the beginning of the year has been restated to exclude $133m of debt securities as they were previously included
as cash equivalents for the purposes of the Consolidated statement of cash flows.
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86
Notes to the financial statements
for the year ended 31 December 2023
About this report
This section outlines the structure of the AMP group, information useful to understand the
AMP group’s financial report and the basis on which the financial report has been prepared.
(a) Understanding the AMP financial report
The AMP group (AMP) is comprised of AMP Limited (the parent), a holding company incorporated and domiciled in Australia,
and the entities it controls (subsidiaries or controlled entities). The consolidated financial statements of AMP Limited include
the financial information of its controlled entities and investments in associates.
The consolidated financial report:
— is a general purpose financial report;
— has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards,
including Australian Accounting Interpretations adopted by the Australian Accounting Standards Board (AASB) and
International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board;
— is presented in Australian dollars with all values rounded to the nearest million dollars ($m), unless otherwise stated;
— has been prepared on a going concern basis generally using a historical cost basis; however where permitted under
accounting standards, a different basis may be used, including the fair value basis;
— presents assets and liabilities on the face of the Consolidated statement of financial position in decreasing order of liquidity
and therefore does not distinguish between current and non-current items;
— presents reclassified comparative information where required for consistency with the current year’s presentation within the
financial report, including restated comparative information to reflect the impact of discontinued operations as detailed in note 5.2.
AMP Limited is a for-profit entity and is limited by shares. The financial statements for the year ended 31 December 2023 were
authorised for issue on 14 February 2024 in accordance with a resolution of the directors.
Sale of AMP Capital
International Infrastructure Equity business
On 3 February 2023, AMP announced the completion of the sale of AMP Capital’s international infrastructure equity business
to DigitalBridge Investment Holdco, LLC which had previously been announced on 28 April 2022. Total transaction value was
$582m, comprising $520m cash, $57m of value from retained estimated future carry and performance fees and $5m of gains
on foreign exchange hedges of the estimated consideration between signing and completion. In addition, AMP remains eligible
for a further cash earn-out of up to $180m which is contingent on future fund raisings. The results of this business have been
classified as discontinued operations in the Consolidated income statement (refer to note 5.2).
Domestic Real Estate and Infrastructure Equity businesses
On 24 March 2023, AMP announced the first stage of completion of the sale and transfer of the AMP Capital real estate and
domestic infrastructure equity business to Dexus, after both parties entered into a non-binding term sheet which contemplated
a revised transaction structure with a two-stage completion process. In the first stage, the revised transaction structure allowed
the transfer to Dexus of most legal entities (holding the majority of the AMP Capital domestic assets and management rights)
as well as employees. The total consideration received for the first stage was $335m.
On 30 November 2023, AMP announced the second stage of completion had occurred and the payment of the remaining
$50m of the base purchase price which was contingent on the transfer of CLAMP had been received. The results of the
Domestic Real Estate and Infrastructure Equity businesses have been classified as discontinued operations in the Consolidated
income statement (refer to note 5.2).
Sale of SuperConcepts Self-Managed Superannuation Fund (SMSF) administration and software businesses
On 8 June 2023, AMP announced it has entered into an agreement to sell its SMSF administration and software business,
SuperConcepts, to a private management group and Pemba Capital Partners. The sale completed on 30 June 2023, and total
consideration of approximately $5m was received. The results of this business have been classified as discontinued operations
in the Consolidated income statement (refer to note 5.2).
(b) Basis of consolidation
Entities are fully consolidated from the date of acquisition, being the date on which the AMP group obtains control, and continue
to be consolidated until the date that control ceases. Control exists where the AMP group is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Income, expenses, assets, liabilities and cash flows of controlled entities are consolidated into the AMP group financial
statements, along with those attributable to the shareholders of the parent entity. All inter-company transactions are eliminated
in full, including unrealised profits arising from intra-group transactions.
Materiality
Information has only been included in the financial report to the extent that it has been considered material and relevant to the
understanding of the financial statements. A disclosure is considered material and relevant if, for example:
— the amount in question is significant because of its size or nature;
— it is important for understanding the results of the AMP group;
— it helps explain the impact of significant changes in the AMP group; and/or
— it relates to an aspect of the AMP group’s operations that is important to its future performance.
(c) Material accounting policies
The material accounting policies adopted in the preparation of the financial report are contained in the notes to the financial
statements to which they relate. All accounting policies have been consistently applied to the current year and comparative
period, unless otherwise stated. Where an accounting policy relates to more than one note or where no note is provided,
the accounting policies are set out below.
Interest income and interest expense, dividend and distribution income
Interest income and interest expense on financial assets and financial liabilities measured at amortised cost are recognised in the
Consolidated income statement using the effective interest method. Revenue from dividends and distributions is recognised when
the AMP group’s right to receive payment is established.
Foreign currency transactions
Transactions, assets and liabilities denominated in foreign currencies are translated into Australian dollars (the functional
currency) using the following applicable exchange rates:
Foreign currency amount
Transactions
Monetary assets and liabilities
Applicable exchange rate
Date of transaction
Reporting date
Non-monetary assets and liabilities carried at fair value
Date fair value is determined
Foreign exchange gains and losses resulting from translation of foreign exchange transactions are recognised in the
Consolidated income statement, except for qualifying cash flow hedges and hedges of net investments in foreign operations,
which are deferred to equity.
On consolidation the assets, liabilities, income and expenses of foreign operations are translated into Australian dollars using
the following applicable exchange rates:
Foreign currency amount
Income and expenses
Assets and liabilities
Equity
Reserves
Applicable exchange rate
Average exchange rate
Reporting date
Historical date
Reporting date
Foreign exchange differences resulting from translation of foreign operations are initially recognised in the foreign currency
translation reserve and subsequently transferred to the Consolidated income statement on disposal of the foreign operation.
87
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88
Notes to the financial statements
for the year ended 31 December 2023
(d) Critical judgements and estimates
Preparation of the financial statements requires management to make judgements, estimates and assumptions about future events.
Information on critical judgements and estimates considered when applying the accounting policies can be found in the following notes:
Accounting estimates and judgements
Note description
Note #
Page
Taxes
Taxes
Impairment of financial assets
Expected credit losses (ECLs)
Financial assets and liabilities measured at fair value
Investments in other financial assets and liabilities
Goodwill and acquired intangible assets
Intangibles
Defined benefit obligations
Discontinued operations
Defined benefit plans
Discontinued operations
Right of use assets and lease liabilities
Right of use asset and lease liabilities
Provisions and contingent liabilities
Provisions and contingent liabilities
1.4
2.1
2.2
2.3
4.1
5.2
6.3
6.4
96
100
102
104
126
134
141
143
1
Section
Results for the year
This section provides insights into how the AMP group has performed in the current year and provides
additional information about those individual line items in the financial statements that the directors
consider most relevant in the context of the operations of the AMP group.
Statutory measures of performance disclosed in this report are:
— Statutory earnings per share (EPS) – basic and diluted, and
— Profit/(loss) after tax attributable to the shareholders of AMP.
NPAT (underlying) is AMP’s key measure of business performance. This performance measure is disclosed
for each AMP operating segment within Segment performance.
1.1
Segment performance
1.2 Other operating expenses
1.3
1.4
Earnings per share
Taxes
1.5 Dividends
1.1
Segment performance
The AMP group identifies its operating segments based on separate financial information that is regularly reviewed by the Chief
Executive Officer and the executive team in assessing performance and determining the allocation of resources. The operating
segments are identified according to the nature of profit generated and services provided, and their performance is evaluated
based on a post-tax operating earnings basis. On 29 May 2023, AMP announced the removal of the Australian Wealth Management
construct from its financial reporting to reflect the simplification of AMP’s operating model. Platforms, Master Trust and Advice
results are reported individually.
Reportable segment
Segment description
AMP Bank
Platforms
Master Trust
Advice
AMP Bank offers residential mortgages, business financing, deposits and transactional banking services.
Platforms provides superannuation, retirement and investment solutions, enabling advisers and their
clients to build a personalised investment portfolio on AMP’s flagship North platform.
Master Trust offers market competitive superannuation and pension solutions to individuals and through
workplace super.
Advice provides professional services to a network of aligned and Independent Financial Advisers
(IFAs). These advisers provide financial advice and wealth solutions to their clients, including retirement
planning, investments and financing. In addition to supporting this network of advisers, the Advice
business partners with a number of advice practices via equity ownership to support their growth.
89
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1.1
Segment performance continued
Reportable segment
Segment description
New Zealand
Wealth
Management
(NZWM)
Group
New Zealand Wealth Management provides clients with a variety of wealth management solutions
including KiwiSaver, corporate superannuation, retail investments and general insurance. It also
operates a wholly owned distribution business operating under the AdviceFirst and enable.me brands.
Group includes strategic partnerships, Group costs not recovered from business units, investment
income and interest expense on corporate debt.
(a) Segment profit
2023
Segment profit/(loss) after
income tax
AMP Bank
Platforms Master Trust
$m
93
$m
90
$m
53
Segment revenue
389
333
343
Presentation adjustments 1
Total statutory revenue
from contracts with
customers
Other segment
information
Income tax (expense)/
benefit
Depreciation and
amortisation
Investment income
2022 2
Segment profit/(loss) after
income tax
Segment revenue
Presentation adjustments 1
Total statutory revenue
from contracts with
customers
Other segment
information
Income tax (expense)/
benefit
Depreciation and
amortisation
Investment income
(40)
(9)
–
103
397
(44)
(10)
–
(38)
(10)
14
(23)
(1)
5
65
53
297
384
(28)
(13)
5
(22)
(3)
3
Advice
$m
NZWM
$m
Group
$m
34
(27)
Total
$m
196
(47)
50
22
(2)
–
(68)
56
32
(7)
–
135
58
1,308
129
1,437
(70)
(23)
83
184
1,348
87
1,435
(52)
(34)
53
(14)
(1)
–
32
125
(13)
(1)
–
23
–
64
(1)
89
23
–
45
1 Presentation adjustments primarily reflect the difference between total segment revenue and statutory revenue from contracts with customers,
as required by AASB 15 Revenue from Contracts with Customers. These adjustments include revenue from sources other than contracts with
customers and expense items which are presented net in the segment results, but presented gross in the Consolidated income statement.
2 The results for the year ended 31 December 2022 have been re-presented to be consistent with the current year presentation of operating segments.
90
Notes to the financial statements
for the year ended 31 December 2023
1.1
Segment performance continued
1.1
Segment performance continued
(b) The following table allocates the disaggregated segment revenue from contracts with
(d) Reconciliations
customers to the group’s operating segments (see note 1.1(a)):
2023
AUM based revenue
Net interest income
Strategic
partnerships 1
Other revenue 2
Total segment
revenue per segment
note
Presentation
adjustments 3
Total statutory
revenue from
contracts with
customers
2022 4
AUM based revenue
Net interest income
Strategic
partnerships 1
Other revenue 2
Total segment
revenue per segment
note
Presentation
adjustments 3
Total statutory
revenue from
contracts with
customers
AMP Bank
Platforms
Master Trust
Advice
NZWM
$m
–
373
–
16
$m
320
–
–
13
$m
343
–
–
–
$m
–
–
–
50
$m
88
–
–
47
Group
$m
–
–
58
–
Total
$m
751
373
58
126
389
333
343
50
135
58
1,308
–
382
–
15
319
–
–
(22)
383
–
–
1
397
297
384
–
–
–
56
56
129
1,437
794
382
89
83
92
–
–
33
–
–
89
–
125
89
1,348
87
1,435
Segment profit after income tax differs from profit/(loss) attributable to shareholders of AMP Limited due to the exclusion of the
following items:
Total segment profit after income tax
Litigation and remediation related costs
Transformation cost out
Impairments
Separation costs
Other items 2
Amortisation of intangible assets
Discontinued operations 3
Net profit after tax
2023
$m
196
(99)
(51)
(10)
–
226
(4)
7
265
2022 1
$m
184
(25)
(61)
(68)
(90)
400
(4)
51
387
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
2 Other items substantively comprise the gain on sale of AMP Capital and SMSF businesses for the year ended 31 December 2023 and gain on sale
of the Infrastructure Debt platform for the year ended 31 December 2022, permanent tax differences and other one-off related impacts.
3 Includes the results of SMSF, International Infrastructure Equity, Real Estate and Domestic Infrastructure Equity businesses for the year ended
31 December 2023 (2022: It included the results of SMSF, International and Domestic Infrastructure Equity, Real Estate, Infrastructure Debt,
Global Equities and Fixed Income businesses).
Total segment revenue differs from Total revenue as follows:
Total segment revenue
Add revenue excluded from segment revenue
— Other income
Add back expenses netted against segment revenue
— Interest expense related to AMP Bank
— External investment manager and adviser fees paid in respect of certain assets under
management
Movement in guarantee liabilities
Total revenue
2023
$m
1,308
65
1,116
455
32
2,976
2022 1
$m
1,348
33
502
435
21
2,339
Includes profit contributions from CLPC, CLAMP, PCCP and sponsor investments.
1
2 Includes Advice, North Guarantee and NZWM other revenues.
3 Presentation adjustments primarily reflect the difference between total segment revenue and statutory revenue from contracts with customers,
as required by AASB 15 Revenue from Contracts with Customers . These adjustments include revenue from sources other than contracts with
customers and expense items which are presented net in the segment results, but presented gross in the Consolidated income statement.
4 The results for the year ended 31 December 2022 have been re-presented to be consistent with the current year presentation of operating segments.
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
(e) Segment assets
Segment asset information has not been disclosed because the balances are not used by the Chief Executive Officer or the
executive team for evaluating segment performance, or in allocating resources to segments.
(c) Statutory revenue:
Statutory revenue from contracts with customers
Fee revenue
— Investment management and related fees
— Financial advisory fees 2
Other income
Total statutory revenue from contracts with customers
2023
$m
800
572
1,372
65
1,437
2022 1
$m
806
596
1,402
33
1,435
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
2 A substantial majority of the financial advisory fees received are paid to advisers. For statutory reporting purposes, financial advisory fees
are presented gross of the related cost which is presented in fee and commission expenses in the Consolidated income statement.
91
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P
2
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2
3
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p
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f
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m
a
t
i
o
n
92
Notes to the financial statements
for the year ended 31 December 2023
1.1
Segment performance continued
1.3
Earnings per share
Accounting policy – recognition and measurement
Revenue from contracts with customers
For AMP, revenue from contracts with customers arises primarily from the provision of investment management and financial
advisory services. Revenue is recognised when control of services is transferred to the customer at an amount that reflects
the consideration which AMP is entitled to in exchange for the services provided. As the customer simultaneously receives and
consumes the benefits as the service is provided, control is transferred over time. Accordingly, revenue is recognised over time.
Fee rebates provided to customers are recognised as a reduction in fee revenue.
Investment management and related fees
Fees are charged to customers in connection with the provision of investment management and other related services. These
performance obligations are satisfied on an ongoing basis, usually daily, and revenue is recognised as the service is provided.
Financial advisory fees
Financial advisory fees consist of fee-for-service revenue and commission income which are earned for providing customers
with financial advice and performing related advisory services. These performance obligations are satisfied over time.
Accordingly, revenue is recognised over time.
A substantial majority of the financial advisory fees received are paid to advisers. Financial advisory fees are presented gross
of the related cost which is presented in Fees and commission expenses in the Consolidated income statement.
1.2
Other operating expenses
Impairment of intangibles
Movement in expected credit losses
Information technology and communication
Lease related impairments and provisions
Professional and consulting fees
Amortisation of intangibles
Depreciation of property, plant and equipment
Other expenses 2
Total other operating expenses
2023
$m
(3)
(12)
(131)
(21)
(124)
(26)
(44)
(231)
(592)
2022 1
$m
(9)
(11)
(186)
(52)
(87)
(44)
(49)
(88)
(526)
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
2 Includes litigation expenses of $136m, net of recovery from insurers, relating to class actions (2022: $nil).
Basic earnings per share
Basic earnings per share is calculated based on Profit attributable to shareholders of AMP and the weighted average
number of ordinary shares outstanding.
Diluted earnings per share
Diluted earnings per share is based on Profit attributable to shareholders of AMP and the weighted average number
of ordinary shares outstanding after adjustments for the effects of all dilutive potential ordinary shares, such as options
and performance rights.
Profit attributable to shareholders of AMP
Continuing operations
Discontinued operations
Profit attributable to shareholders of AMP
Weighted average number of ordinary shares for basic EPS 2
Add: potential ordinary shares considered dilutive
2023
$m
2022 1
$m
19
246
265
2023
millions
2,860
42
1
386
387
2022
millions
3,213
51
Weighted average number of ordinary shares used in the calculation of dilutive earnings
per share
2,902
3,264
Earnings per share
Basic
Diluted
Earnings per share for continuing operations
Basic
Diluted
2023
cents
9.3
9.1
0.7
0.6
2022
cents
12.0
11.9
–
–
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
2 The weighted average number of ordinary shares outstanding is calculated after deducting the weighted average number of treasury shares
held during the year.
Earnings per share for discontinued operations
Basic
Diluted
8.6
8.5
12.0
11.9
93
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P
2
0
2
3
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f
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m
a
t
i
o
n
94
Notes to the financial statements
for the year ended 31 December 2023
1.4
Taxes
Our taxes
This sub-section outlines the impact of income taxes on the results and financial position of AMP. In particular:
— the impact of tax on the reported result;
— amounts owed to/receivable from the tax authorities; and
— deferred tax balances that arise due to differences in the tax and accounting treatment of balances recorded in
the financial report.
These financial statements include the disclosures relating to tax required under accounting standards. Further
information on AMP’s tax matters can be found in the AMP Tax Report at amp.com.au/shares.
(a) Income tax benefit
The following table provides a reconciliation of differences between prima facie tax calculated as 30% of the profit or loss
before income tax for the year and the income tax expense or benefit recognised in the Consolidated income statement for
the year.
Loss before tax
Tax at the Australian tax rate of 30% (2022: 30%)
Non-deductible expenses
Non-taxable income
Other items
Over provided in previous years
Differences in overseas tax rates
Income tax benefit per Consolidated income statement
(b) Analysis of income tax benefit
Current tax benefit/(expense)
(Decrease)/increase in deferred tax assets 2
Decrease/(increase) in deferred tax liabilities 3
Income tax benefit
2023
$m
2022 1
$m
(70)
21
(23)
22
33
35
1
89
69
(84)
104
89
(57)
17
(23)
41
2
19
2
58
(2)
197
(137)
58
1 Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis. Refer to note 5.2.
2 Deferred Tax Assets (DTAs) before offset adjustments increased by $26m, of which $15m related to discontinued operations. In addition, DTAs
related to continuing operations increased by $11m, reflecting $95m recognised in the Consolidated statement of comprehensive income
(relating to reserves and defined benefit plans), offset by $84m recognised in income tax expense.
3 Deferred Tax Liabilities (DTLs), before offset adjustments, decreased by $47m related to continuing operations, reflecting $104m recognised
in income tax benefit, offset by $57m recognised in the Consolidated statement of comprehensive income (relating to reserves and defined
benefit plans).
1.4
Taxes continued
(c) Analysis of deferred tax balances
Analysis of deferred tax assets
Expenses deductible in the future years
Unrealised investment losses
Losses available for offset against future taxable income
Lease liabilities
Capitalised software expenses
Transferred to assets held for sale
Other
Total deferred tax asset
Offset to tax
Net deferred tax assets
Analysis of deferred tax liabilities
Unrealised investment gains
Right of use assets
Intangible assets
Unearned revenue
Transferred to liabilities held for sale
Other
Total deferred tax liability
Offset to tax
Net deferred tax liabilities
(d) Amounts recognised directly in equity
Deferred income tax benefit/(expense) related to items taken directly to equity during the year
(e) Unused tax losses not recognised
Revenue losses
Capital losses 1
2023
$m
226
29
352
159
84
–
–
850
(210)
640
61
97
25
30
–
13
226
(210)
16
2023
$m
38
2023
$m
212
980
2022
$m
236
58
289
169
108
(37)
1
824
(268)
556
121
118
26
18
(14)
4
273
(268)
5
2022
$m
(28)
2022
$m
212
1,115
1 Unused capital losses not recognised do not include projections of capital gain/(loss) from the sales of AMP Capital Holding Limited group
entities and small financial planning entities.
95
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P
2
0
2
3
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f
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m
a
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i
o
n
96
Notes to the financial statements
for the year ended 31 December 2023
1.4
Taxes continued
1.5
Dividends
Any tax impact on income and expense items that are recognised directly in equity is also recognised directly in equity.
Previous year final dividend on ordinary shares
Accounting policy – recognition and measurement
Income tax expense
Income tax expense is the tax payable on taxable income for the current period based on the income tax rate for each
jurisdiction and adjusted for changes in deferred tax assets and liabilities. These changes are attributable to:
— temporary differences between the tax bases of assets and liabilities and their Consolidated statement of financial
position carrying amounts;
— unused tax losses; and
— the impact of changes in the amounts of deferred tax assets and liabilities arising from changes in tax rates or in the
manner in which these balances are expected to be realised.
Adjustments to income tax expense are also made for any differences between the amounts paid, or expected to be paid,
in relation to prior periods and the amounts provided for these periods at the start of the current period.
Deferred tax
Deferred tax assets and liabilities are recognised for temporary differences and are measured at the tax rates which
are expected to apply when the assets are recovered or liabilities are settled, based on tax rates that have been enacted
or substantively enacted for each jurisdiction at the reporting date. Deferred tax assets and liabilities are not discounted
to present value.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Tax consolidation
AMP Limited and its wholly owned Australian controlled entities are part of a tax-consolidated group, with AMP Limited being
the head entity (the company). A tax funding agreement has been entered into by the head entity and the controlled entities
in the tax-consolidated group and requires entities to fully compensate the company for current tax liabilities and to be fully
compensated by the company for any current or deferred tax assets in respect of tax losses arising from external transactions
occurring after 30 June 2003, the implementation date of the tax-consolidated group.
Critical accounting estimates and judgements
The AMP group is subject to taxes in Australia and other jurisdictions where it has operations. The application
of tax law to the specific circumstances and transactions of the AMP group requires the exercise of judgement
by management. The tax treatments adopted by management in preparing the financial statements may
be impacted by changes in legislation and interpretations or be subject to challenge by tax authorities.
Judgement is also applied by management in setting assumptions used to forecast future profitability in order
to determine the extent to which the recovery of carried forward tax losses and deductible temporary
differences are probable for the purpose of meeting the criteria for recognition as deferred tax assets (DTAs).
Future profitability may differ from forecasts which could impact management’s expectations in future periods
with respect to the recoverability of DTAs and result in DTA impairments or reversals of prior DTA impairments.
Dividends paid and proposed during the year are shown in the table below:
Dividend per share (cents)
Franking percentage
Dividend amount ($m)
Payment date
Dividends paid
2023
Final
2.0
20%
55
2023
Interim
2.5
20%
70
2022
Final
2.5
20%
75
4 April 2024
29 September 2023
3 April 2023
2022
Interim
–
–
–
–
2022
$m
–
–
–
2023
$m
75
70
145
Interim dividend on ordinary shares
Total dividends paid 1
1 Total dividends paid includes $nil dividends paid on treasury shares (2022: $nil).
Dividend franking credits
Franking credits available to shareholders are $58m (2022: $71m), based on a tax rate of 30%. This amount is calculated from
the balance of the franking account as at the end of the reporting period, adjusted for franking credits that will arise from the
settlement, after the end of the reporting date, of liabilities for income tax and receivables for dividends.
The Company’s ability to utilise the franking account credits depends on meeting Corporations Act 2001 requirements to declare
dividends. The impact of the proposed dividend will be to reduce the balance of franking credit account by $5m.
Franked dividends are franked at a tax rate of 30%.
97
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P
2
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2
3
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i
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a
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i
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98
Notes to the financial statements
for the year ended 31 December 2023
2
Section
Loans and advances, investments, intangibles and working capital
This section highlights the AMP group’s assets and working capital used to support the AMP group’s
activities.
2.1
Loans and advances
2.2
Investments in other financial assets and liabilities
2.3
Intangibles
2.4 Other assets
2.5 Receivables
2.6 Payables
2.7 Fair value information
2.1
Loans and advances
(a) Loans and advances
Housing loans
Business finance loans
Total loans and advances 1 2
Less: Provisions for impairment
Individual provisions
– Housing loans
– Business finance loans
Collective provisions
Total provisions for impairment
Total net loans and advances
Movement in provisions:
Individual provision
Balance at the beginning of the year
Increase in provision – housing loans
Bad debts written off
Provision released
Balance at the end of the year
Collective provision
Balance at the beginning of the year
Increase in provision
Balance at the end of the year
2023
$m
24,386
244
24,630
(2)
(54)
(44)
(100)
24,530
66
1
(1)
(10)
56
35
9
44
2022
$m
23,929
252
24,181
(2)
(64)
(35)
(101)
24,080
90
–
(1)
(23)
66
26
9
35
1 Total loans and advances include net capitalised costs of $134m (2022: $119m).
2 Total loans and advances of $18,498m (2022: $18,691m) is expected to be received more than 12 months after the reporting date.
2.1
Loans and advances continued
(b) Expected credit losses
The following table provides the changes to expected credit losses (ECLs) relating to loans and advances during the year.
Stage 1
Stage 2
collective
collective
Stage 3
collective
and individual
2023
Balance at the beginning of the year
Transferred to Stage 1 (12-months ECL)
Transferred to Stage 2 (lifetime ECL credit impaired)
Transferred to Stage 3 (lifetime ECL credit impaired)
Increased/(released) provisions during the year
Bad debts written off
Release of provision for business finance loans
Balance at the end of the year
2022
Balance at the beginning of the year
Transferred to Stage 1 (12-months ECL)
Transferred to Stage 2 (lifetime ECL credit impaired)
Transferred to Stage 3 (lifetime ECL credit impaired)
Increased/(released) provisions during the year
Bad debts written off
Release of provision for business finance loans
Balance at the end of the year
$m
18
7
(1)
(1)
(7)
–
–
16
18
12
(1)
–
(11)
–
–
18
$m
12
(4)
7
(3)
3
–
–
15
8
(2)
2
(1)
5
–
–
12
$m
71
(3)
(6)
4
11
(1)
(7)
69
90
(10)
(1)
1
8
(1)
(16)
71
Total
$m
101
–
–
–
7
(1)
(7)
100
116
–
–
–
2
(1)
(16)
101
Accounting policy – recognition and measurement
Financial assets measured at amortised cost – loans and advances and debt securities
Loans and advances and debt securities are measured at amortised cost when both of the following conditions are met:
— the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets measured at amortised cost are initially recognised at fair value plus transaction costs that are directly
attributable to the acquisition or issue of the financial asset. These assets are subsequently recognised at amortised cost
using the effective interest rate method. Gains and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
Loans and advances are financial assets with fixed or determinable payments that are not quoted in an active market.
They arise when AMP Bank provides money directly to a customer, including loans and advances to advisers, and with
no intention of trading the financial asset. Loans and advances are initially recognised at fair value, including direct and
incremental transaction costs relating to loan origination. They are subsequently measured at amortised cost using the
effective interest method, less any provision for impairment.
99
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2
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2
3
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p
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a
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i
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f
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r
m
a
t
i
o
n
100
Notes to the financial statements
for the year ended 31 December 2023
2.1
Loans and advances continued
2.2
Investments in other financial assets and liabilities
Impairment of financial assets
An allowance for expected credit losses (ECLs) is recognised for financial assets measured at amortised cost, debt securities
measured at fair value through other comprehensive income (FVOCI) and loan commitments. ECLs are probability weighted
estimates of credit losses and are measured as the present value of all cash shortfalls discounted at the effective interest rate
of the financial instrument. The key elements in the measurement of ECLs are as follows:
— PD – the probability of default is an estimate of the likelihood of default over a given time horizon.
— EAD – the exposure at default is an estimate of the exposure at a future default date, taking into account expected
changes in the exposure after the reporting date.
— LGD – loss given default is an estimate of the loss arising in the case where default occurs at a given time. It is based on the
difference between cash flows due to the group in accordance with the contract and the cash flows that the group expects
to receive, including from the realisation of any collateral.
The group estimates these elements using appropriate credit risk models taking into consideration a number of factors,
including the internal and external credit ratings of the assets, nature and value of collateral and forward-looking macro-
economic scenarios.
Other than ECL on trade receivables, where a simplified approach is taken, the group applies a three-stage approach
to measure the ECLs as follows:
Stage 1 (12-month ECL)
The group collectively assesses and recognises a provision at an amount equal to 12-month ECL when financial assets
are current and/or have had a good performance history and are of low credit risk. It includes financial assets where the
credit risk has improved and the financial assets have been reclassified from Stage 2 or even Stage 3 based on improved
performance observed over a predefined period of time. A financial asset is considered to have low credit risk when its
credit risk rating is equivalent to the globally understood definition of ‘investment grade’.
Stage 2 (Lifetime ECL – not credit impaired)
The group collectively assesses and recognises a provision at an amount equal to lifetime ECL on financial assets where
there has been a significant increase in credit risk since initial recognition but the financial assets are not credit impaired.
The quantitative criteria used to determine a significant increase in credit risk is a series of relative and absolute thresholds.
Financial assets that were 30 days past due at least once over the last six months are deemed to have significant increase
in credit risk since initial recognition. For loans and advances, other risk factors like hardship, loan to value ratio (LVR) and
loan to income ratio (LTI) are also considered in order to determine a significant increase in credit risk.
Stage 3 (Lifetime ECL – credit impaired)
The group measures loss allowances at an amount equal to lifetime ECL on financial assets that are determined to be credit
impaired based on objective evidence of impairment. Financial assets are classified as impaired when payment is 90 days past
due or when there is no longer reasonable assurance that principal or interest will be collected in their entirety on a timely basis.
Critical accounting estimates and judgements
Impairment of financial assets
The impairment provisions (individual and collective) are outputs of ECL models with a number of underlying
assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models
that are considered accounting estimates and judgements include:
— the AMP group’s internal grading which assigns PDs to the individual grades;
— the AMP group’s estimates of LGDs arising in the event of default;
— the AMP group’s criteria for assessing if there has been a significant increase in credit risk;
— development of ECL models, including the various formulas, choice of inputs and assumptions; and
— determination of associations between macroeconomic scenarios and their probability weightings, to derive
the economic inputs into the ECL models.
Future outcomes and macro-economic conditions which differ from management’s assumptions and estimates
could result in changes to the timing and amount of credit losses to be recognised.
101
A
M
P
2
0
2
3
A
n
n
u
a
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e
p
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p
o
r
t
2023
$m
12
315
208
323
858
3,819
3,819
679
12
691
2022
$m
5
255
233
575
1,068
4,150
4,150
599
8
607
5,368
5,825
116
63
179
161
133
294
Financial assets measured at fair value through profit or loss
Equity securities
Debt securities
Unlisted managed investment schemes 1
Derivative financial assets
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
Debt securities 2
Total financial assets measured at fair value through other comprehensive income
Other financial assets measured at amortised cost
Debt securities
Other financial assets
Total other financial assets measured at amortised cost
Total other financial assets
Other financial liabilities
Derivative financial liabilities
Collateral deposits held
Total other financial liabilities
1 $54m (2022: $53m) of unlisted managed investment schemes are held by AMP Foundation for charitable purposes in accordance with the
AMP Foundation Trust Deed.
2 Debt securities measured at fair value through other comprehensive income are assets of AMP Bank.
Accounting policy – recognition and measurement
Recognition and derecognition of financial assets and liabilities
Financial assets and financial liabilities are recognised at the date the AMP group becomes a party to the contractual
provisions of the instrument. At initial recognition, financial assets are classified as subsequently measured at fair value through
profit or loss, fair value through other comprehensive income (OCI), or amortised cost. The classification of financial assets
at initial recognition depends on the financial asset’s contractual cash flow characteristics and the group’s business model for
managing them.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or are
transferred. A transfer occurs when substantially all the risks and rewards of ownership of the financial asset are passed
to an unrelated third party. Financial liabilities are derecognised when the obligation specified in the contract is discharged,
cancelled or expires.
Financial assets measured at fair value through profit or loss
Financial assets measured on initial recognition as financial assets measured at fair value through profit or loss are initially
recognised at fair value, determined as the purchase cost of the asset, exclusive of any transaction costs. Transaction costs
are expensed as incurred in profit or loss. Any realised and unrealised gains or losses arising from subsequent measurement
at fair value are recognised in the Consolidated income statement in the period in which they arise.
Financial assets measured at fair value through profit or loss – debt securities
Debt securities can be irrevocably designated, at initial recognition, as measured at fair value through profit or loss where
doing so would eliminate or significantly reduce a measurement or recognition inconsistency or otherwise results in more
relevant information. Fair value on initial recognition is determined as the purchase cost of the asset, exclusive of any
transaction costs. Transactions costs are expensed as incurred in profit or loss. Subsequent measurement is determined
with reference to the bid price at the reporting date. Any realised and unrealised gains or losses arising from subsequent
measurement at fair value are recognised in the Consolidated income statement in the period in which they arise.
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102
Notes to the financial statements
for the year ended 31 December 2023
2.2
Investments in other financial assets and liabilities continued
2.3
Intangibles
Financial assets measured at fair value through OCI – debt securities
Debt securities are measured at fair value through OCI when both of the following conditions are met:
— the instrument is held within a business model, the objective of which is achieved by both collecting contractual cash flows
and selling financial assets; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Fair value through OCI instruments are subsequently measured at fair value with gains and losses arising due to changes
in fair value recognised in OCI. Interest income and foreign exchange gains and losses and impairment losses or reversals
are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. The remaining fair
value changes are recognised in OCI. The accumulated gains or losses recognised in OCI are recycled to profit and loss upon
derecognition of the assets.
The group classifies debt securities held by AMP Bank under this category.
Financial assets measured at amortised cost – debt securities
Refer to note 2.1 for details.
Critical accounting estimates and judgements
Financial assets and liabilities measured at fair value
Where available, quoted market prices for the same or similar instruments are used to determine fair value.
Where there is no market price available for an instrument, a valuation technique is used. Management applies
judgement in selecting valuation techniques and setting valuation assumptions and inputs. Further detail on the
determination of fair value of financial instruments is set out in note 2.7.
2023
Balance at the beginning of the year
Additions through separate acquisitions 1
Additions through internal development
Reductions through disposal
Amortisation expense 2
Impairment loss
Balance at the end of the year
2022
Balance at the beginning of the year
Additions through separate acquisitions
Additions through internal development
Reductions through disposal
Transferred from inventories
Amortisation expense 2
Impairment loss
Transferred to assets held for sale
Balance at the end of the year
Goodwill
$m
70
18
–
–
–
–
88
149
–
–
–
–
–
–
(79)
70
Capitalised
costs
$m
92
–
27
(9)
(24)
(3)
83
123
–
26
–
–
(43)
(9)
(5)
92
Distribution
networks
Other
intangibles
$m
36
13
–
(5)
(6)
–
38
50
20
–
(23)
(5)
(6)
–
–
36
$m
–
–
–
–
–
–
–
8
–
–
(1)
–
–
–
(7)
–
Total
$m
198
31
27
(14)
(30)
(3)
209
330
20
26
(24)
(5)
(49)
(9)
(91)
198
1 On 31 March 2023, AdviceFirst, a subsidiary of AMP New Zealand Holdings Limited acquired enable.me, a financial advisory and coaching
business for upfront consideration of NZD 15m and contingent consideration of NZD 7m, subject to achieving certain revenue targets. This
resulted in recognition of $18m in goodwill and $8m in distribution networks.
2 Includes $4m of amortisation expense related to discontinued operations (2022: $5m).
Accounting policy – recognition and measurement
Goodwill
Goodwill acquired in a business combination is recognised at cost and subsequently measured at cost less any accumulated
impairment losses. The cost represents the excess of the cost of a business combination over the fair value of the identifiable
assets acquired and liabilities assumed.
Capitalised costs
Costs are capitalised when the costs relate to the creation of an asset with expected future economic benefits which are
capable of reliable measurement. Capitalised costs are amortised on a straight-line basis over the estimated useful life of the
asset, commencing at the time the asset is first put into use or held ready for use, whichever is the earlier.
Distribution networks
Distribution networks such as customer lists, financial planner client servicing rights or other distribution-related rights, either
acquired separately or through a business combination, are initially measured at fair value and subsequently measured at cost
less amortisation and any accumulated impairment losses.
103
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104
Notes to the financial statements
for the year ended 31 December 2023
2.3
Intangibles continued
2.5
Receivables
Amortisation
Intangible assets with finite useful lives are amortised on a straight-line basis over the useful life of the intangible asset.
The estimated useful lives are generally:
Item
Capitalised costs
Distribution networks
Useful life
Up to 10 years
2 to 15 years
The useful life of each intangible asset is reviewed at the end of the period and, where necessary, adjusted to reflect
current assessments.
Impairment testing
Goodwill and intangible assets that have indefinite useful lives are tested at least annually for impairment. Other intangible
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units or CGUs). An impairment loss is recognised when the CGU’s carrying amount exceeds the
CGU’s recoverable amount. When applicable, an impairment loss is first allocated to goodwill and any remainder is then
allocated to the other assets on a pro-rata basis.
Composition of goodwill
The goodwill of $88m (2022: $70m) relates to the NZWM CGU. The $18m increase in goodwill relates to NZWM’s acquisition
of the enable.me business during this year.
The annual impairment assessment for NZWM resulted in significant headroom and there was no reasonably possible change
to a key assumption used in the assessment that would result in an impairment as at 31 December 2023.
Critical accounting estimates and judgements
Management applies judgement in selecting valuation techniques and setting valuation assumptions
to determine the:
— acquisition date fair value and estimated useful life of acquired intangible assets;
— allocation of goodwill to CGUs and determining the recoverable amount of the CGUs; and
— assessment of whether there are any impairment indicators for acquired intangibles and internally
generated intangibles, where required, in determining the recoverable amount.
2.4
Other assets
Planner registers held for sale
Prepayments
Property, plant and equipment
Total other assets
Current
Non-current
2023
$m
2022
$m
2
29
17
48
27
21
9
30
26
65
35
30
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Investment related receivables
Client register receivables
Collateral receivables
Trade debtors and other receivables 1
Sublease receivables
Total receivables 2
Current
Non-current
2023
$m
25
40
43
231
87
426
316
110
2022
$m
29
52
108
156
60
405
297
108
Includes $50m of receivables from insurers related to the shareholder class action (2022: $nil). Refer to note 6.7 for more information.
1
2 Receivables are presented net of ECL of $39m (2022: $40m).
Accounting policy – recognition and measurement
Receivables
Trade debtors, client register, sublease receivables, collateral and other receivables are measured at amortised cost, less
an allowance for ECLs. Investment related receivables are financial assets measured at fair value through profit or loss.
The group applies a simplified approach in calculating ECLs for receivables. Therefore, the group does not track changes
in credit risk but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The group has established
a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
2.6
Payables
Accrued expenses
Trade creditors and other payables
Total payables
Current
Non-current
Accounting policy – recognition and measurement
Payables
2023
$m
69
116
185
185
–
2022
$m
99
110
209
209
–
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Payables are measured at the nominal amount payable. Given the short-term nature of most payables, the nominal amount
payable approximates fair value.
106
Notes to the financial statements
for the year ended 31 December 2023
2.7
Fair value information
2.7
Fair value information continued
The following table shows the carrying amount and estimated fair values of financial instruments, including their levels in the
fair value hierarchy.
2023
Financial assets measured at fair value
Equity securities
Debt securities
Unlisted managed investment schemes
Derivative financial assets
Total financial assets measured at fair value
Financial assets not measured at fair value
Loans and advances
Debt securities
Other financial assets
Total financial assets not measured at fair value
Financial liabilities measured at fair value
Derivative financial liabilities
Collateral deposits held
Guarantee liabilities
Total financial liabilities measured at fair value
Financial liabilities not measured at fair value
AMP Bank
— Deposits
— Other
— Subordinated Debt
Corporate borrowings
Total financial liabilities not measured at fair value
Carrying
amount
Level 1
Level 2
Level 3
Total fair
value
$m
$m
$m
$m
$m
12
–
4,134
3,601
208
323
–
–
4,677
3,601
–
533
90
323
946
12
–
118
–
130
12
4,134
208
323
4,677
24,530
679
12
25,221
116
63
32
211
21,370
6,045
202
765
28,382
–
24,499
24,499
–
–
–
–
–
–
–
–
683
12
695
116
63
–
179
–
–
–
778
778
21,503
6,058
205
–
27,766
–
–
683
12
24,499
25,194
–
–
32
32
–
–
–
–
–
116
63
32
211
21,503
6,058
205
778
28,544
107
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2022
Financial assets measured at fair value
Equity securities
Debt securities
Unlisted managed investment schemes
Derivative financial assets
Total financial assets measured at fair value
Financial assets not measured at fair value
Loans and advances
Debt securities
Other financial assets
Total financial assets not measured at fair value
Financial liabilities measured at fair value
Derivative financial liabilities
Collateral deposits held
Guarantee liabilities
Total financial liabilities measured at fair value
Financial liabilities not measured at fair value
AMP Bank
— Deposits
— Other
— Subordinated Debt
Corporate borrowings
Total financial liabilities not measured at fair value
Carrying
amount
Level 1
Level 2
Level 3
Total fair
value
$m
$m
$m
$m
$m
5
–
–
4,405
3,260
1,145
233
575
–
–
100
575
5,218
3,260
1,820
5
–
133
–
138
5
4,405
233
575
5,218
24,080
599
8
24,687
161
133
64
358
20,737
6,769
201
1,255
28,962
–
–
–
–
–
–
–
–
161
133
–
294
–
–
–
878
878
20,778
6,752
209
396
28,135
–
600
8
23,963
23,963
–
–
600
8
608
23,963
24,571
–
–
64
64
–
–
–
–
–
161
133
64
358
20,778
6,752
209
1,274
29,013
AMP’s methodology and assumptions used to estimate the fair value of financial instruments are described below:
Equity securities
Debt securities
Loans
The fair value of equity securities is established using valuation techniques, including the use
of recent arm’s length transactions, references to other instruments that are substantially the
same, discounted cash flow analysis and option pricing models.
The fair value of listed debt securities reflects the bid price at the reporting date. Listed
debt securities that are not frequently traded are valued by discounting estimated
recoverable amounts.
The fair value of unlisted debt securities is estimated using interest rate yields obtainable
on comparable listed investments. For debt securities with a maturity of less than 12 months,
par value is considered a reasonable approximation of fair value.
The estimated fair value of loans represents the discounted amount of estimated future cash
flows expected to be received, based on the maturity profile of the loans. As the loans are
unlisted, the discount rates applied are based on the yield curve appropriate to the remaining
term of the loans. The loans may, from time to time, be measured at an amount in excess of fair
value due to fluctuations on fixed rate loans. In these situations, as the fluctuations in fair value
would not represent a permanent diminution and the carrying amounts of the loans are recorded
at recoverable amounts after assessing impairment, it would not be appropriate to restate their
carrying amounts.
Unlisted managed
investment schemes
The fair value of investments in unlisted managed investment schemes is determined on the basis
of redemption price, and independent external valuation of those managed investment schemes
as appropriate at the reporting date.
108
Notes to the financial statements
for the year ended 31 December 2023
2.7
Fair value information continued
2.7
Fair value information continued
Derivative financial
assets and liabilities
Corporate
borrowings
The fair value of financial instruments traded in active markets (such as publicly traded
derivatives) is based on quoted market prices (current bid price or current offer price)
at the reporting date. The fair value of financial instruments not traded in an active market
(eg over-the-counter derivatives) is determined using valuation techniques. Valuation techniques
include net present value techniques, option pricing models, discounted cash flow methods and
comparison to quoted market prices or dealer quotes for similar instruments. The models use
a number of inputs, including the credit quality of counterparties, foreign exchange spot and
forward rates, yield curves of the respective currencies, currency basis spreads between the
respective currencies, interest rate curves and forward rate curves of the underlying instruments.
Some derivatives contracts are significantly cash collateralised, thereby minimising both
counterparty risk and the group’s own non-performance risk.
Borrowings comprise commercial paper, drawn liquidity facilities, various floating-rate and
medium-term notes and subordinated debt. The estimated fair value of borrowings is determined
with reference to quoted market prices. For borrowings where quoted market prices are not
available, a discounted cash flow model is used, based on a current yield curve appropriate
for the remaining term to maturity. For short-term borrowings, the par value is considered
a reasonable approximation of the fair value.
AMP Bank
deposits and other
borrowings
The estimated fair value of deposits and other borrowings represents the discounted amount
of estimated future cash flows expected to be paid based on the residual maturity of these
liabilities. The discount rate applied is based on a current yield curve appropriate for similar
types of deposits and borrowings at the reporting date.
Guarantee
liabilities
The fair value of the guarantee liabilities is determined as the net present value of future cash
flows discounted using market rates. The future cash flows are determined using risk neutral
stochastic projections based on assumptions such as mortality rate, lapse rate and asset class
allocation/correlation. The future cash flows comprise expected guarantee claims and hedging
expenses net of expected fee revenue.
Financial assets and liabilities measured at fair value are categorised using the fair value hierarchy which reflects the
significance of inputs into the determination of fair value as follows:
— Level 1: the fair value is valued by reference to quoted prices and active markets for identical assets or liabilities.
— Level 2: the fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices).
— Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
There have been no significant transfers between Level 1 and Level 2 during the 2023 financial year. Transfers to and from
Level 3 are shown in the Reconciliation of Level 3 values table later in this note.
Level 3 fair values
The following table shows the valuation techniques used in measuring Level 3 fair values of financial assets measured at fair
value on a recurring basis, as well as the significant unobservable inputs used.
Type
Equity securities
Valuation technique
Significant unobservable inputs
Discounted cash flow approach utilising
cost of equity as the discount rate
Unlisted managed investment schemes Discounted cash flow and income
approach
Guarantee liabilities
Discounted cash flow approach
Discount rate
Terminal value growth rate
Cash flow forecasts
Discount rate
Terminal value growth rate
Cash flow forecasts
Discount rate
Hedging costs
Sensitivity
The following table illustrates the impacts to profit before tax and equity resulting from reasonably possible changes
in key assumptions.
Financial assets 1
Equity securities
Unlisted managed investment schemes
Financial liabilities
Guarantee liabilities 2
2023
2022
(+)
$m
2
24
3
(-)
$m
(2)
(24)
(+)
$m
1
27
(-)
$m
(1)
(27)
(9)
2
(7)
1 Reasonably possible changes in price movements of 20% (2022: 20%) have been applied in determining the impact on profit after tax and equity.
2 Reasonably possible changes in equity market movements of 20% (2022: 20%) and bond yield movements of 100bps (2022: 100 bps) have
been applied in determining the impact on profit after tax and equity. The sensitivities disclosed are shown net of the offsetting impacts
of derivatives held as economic hedges of the guarantee liabilities.
Reconciliation of Level 3 values
The following table shows movements in the fair values of financial instruments measured at fair value on a recurring basis
and categorised as Level 3 in the fair value hierarchy:
Balance
at the
beginning
of the year
FX gains/
(losses)
Total
gains/
(losses)
Purchases/
(deposits)
Sales/
(withdrawals) 1
Net
transfers
in/(out) 2
Balance at
the end of
the year
Total
gains/
(losses) on
assets and
liabilities
held at
reporting
date
$m
$m
$m
$m
$m
$m
$m
$m
2023
Assets classified as Level 3
Equity securities
Unlisted managed
investment schemes
Liabilities classified as
Level 3
5
133
–
1
–
(9)
Guarantee liabilities
(64)
–
18
2022
Assets classified as Level 3
Equity securities
Unlisted managed
investment schemes
Liabilities classified as
Level 3
13
51
–
–
(8)
18
7
3
–
–
–
–
(10)
–
–
12
118
–
(8)
14
–
(32)
18
–
–
–
64
5
133
(8)
18
Guarantee liabilities
(85)
–
13
–
8
–
(64)
13
1 A positive value in respective of guarantee liabilities represents claim payments.
2 Net transfers in of $64m in 2022 related to investments in AMP Capital Infrastructure Debt Fund III USD LP and AMP Capital Infrastructure
Debt Fund IV USD LP which were transferred from investments in associates as AMP no longer had significant influence following the sale
of the infrastructure debt platform.
109
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110
Notes to the financial statements
for the year ended 31 December 2023
3
Section
Capital structure and financial risk management
This section provides information relating to:
— the AMP group’s capital management and equity and debt structure; and
— exposure to financial risks – how the risks affect financial position and performance and how the risks
are managed, including the use of derivative financial instruments
The capital structure of the AMP group consists of equity and debt. AMP determines the appropriate
capital structure in order to finance the current and future activities of the AMP group and satisfy the
requirements of the regulator. The directors review the group’s capital structure and dividend policy
regularly and do so in the context of the group’s ability to satisfy minimum and target capital requirements.
3.1 Contributed equity
3.2
Interest-bearing liabilities
3.3 Financial risk management
3.4 Derivatives and hedge accounting
3.5 Capital management
3.1
Contributed equity
Issued capital
2,741,080,904 (2022: 3,043,140,026) ordinary shares fully paid
4,670
5,008
2023
$m
2022
$m
Treasury shares 1
2,126,387 (2022: 2,126,387) treasury shares
Total contributed equity
(6)
(6)
2,738,954,517 (2022: 3,041,013,639) ordinary shares fully paid
4,664
5,002
Issued capital
Balance at the beginning of the year
302,059,122 (2022: 222,965,827) shares purchased on-market
Capital reduction 2
Balance at the end of the year
5,008
(338)
–
4,670
10,206
(267)
(4,931)
5,008
1 Held by AMP Foundation.
2 In December 2022, in accordance with section 258F of the Corporations Act 2001, the AMP board resolved to reduce AMP’s share capital
by $4,931m, representing historic permanent losses recognised by the AMP group in prior reporting periods. Those losses arose from
businesses which no longer operate, including UK demerger losses and losses relating to AMP’s wealth protection and mature businesses
which were sold to Resolution Life in 2020. The adjustment to share capital had the effect of reducing AMP’s contributed equity and
retained losses as disclosed on the Consolidated statement of changes in equity. The adjustment had no impact on the net assets, financial
results, cash flows, and regulatory capital of the consolidated group or the company’s number of shares issued.
Holders of ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares
held. Fully paid ordinary shares carry the right to one vote per share. Ordinary shares have no par value.
Accounting policy – recognition and measurement
Issued capital
Issued capital in respect of ordinary shares is recognised as the fair value of consideration received by the AMP Limited entity.
Incremental costs directly attributable to the issue of certain new shares are recognised in equity as a deduction, net of tax,
from the proceeds.
Treasury shares
AMP Foundation holds AMP Limited shares (treasury shares). These shares, plus any corresponding Consolidated income
statement fair value movement on the shares and any dividend income, are eliminated on consolidation.
3.2
Interest-bearing liabilities
(a) Interest-bearing liabilities
Interest-bearing liabilities
AMP Bank
— Deposits 1
— Other
— Subordinated debt 2, 3
Corporate borrowings 3
— AMP Capital Notes 2 4
— CHF Medium Term Notes 5
— AUD Medium Term Notes 6
— AMP Notes 3 (first call 2023, maturity 2028) 7
— Other
2023
Non-
current
$m
Current
$m
Total
$m
Current
$m
2022
Non-
current
$m
Total
$m
20,540
5,695
–
–
218
–
–
–
830
350
202
274
–
273
–
–
21,370
19,983
754
20,737
6,045
202
3,229
3,540
6,769
–
201
201
274
218
273
–
–
–
332
–
252
146
273
252
–
–
–
273
584
–
252
146
Total interest-bearing liabilities
26,453
1,929
28,382
23,942
5,020
28,962
1 Deposits comprise at-call customer deposits and customer term deposits with AMP Bank.
2 AMP Bank subordinated debt was issued on 7 October 2022 and matures on 7 October 2032.
3 The current/non-current classification of AMP Bank subordinated debt and corporate borrowings is based on the maturity of the underlying
debt instrument and related principal repayment obligations. The carrying values of AMP Bank subordinated debt and corporate borrowings
include interest payable of $5m (2022: $8m), which is expected to be settled within the next 12 months.
4 AMP Capital Notes 2 (ASX:AMPPB) were issued on 23 December 2019. Subject to APRA approval, AMP has the right, but not the obligation,
to redeem all or some of the Notes on 16 December 2025, or, subject to certain conditions, at a later date. They are perpetual with no maturity
date. In certain circumstances, AMP may be required to convert some or all of the Notes into AMP ordinary shares.
5 Senior Unsecured Fixed Rate Notes of CHF 140m were issued on 18 April 2019 and were subsequently increased by CHF 100m on 3 December
2019. These Notes were fully repaid in instalments of CHF 30m on 31 August 2022 and of CHF 210m on 18 July 2023 respectively. Senior Unsecured
Fixed Rate Notes of CHF 175m were issued on 3 March 2020. These Notes were partially repaid in instalments of CHF 10m on 31 August 2022 and
of CHF 39m on 7 December 2023 respectively. The remaining balance matures on 3 June 2024.
6 Senior Unsecured Medium Term Notes were issued on 9 November 2023. The maturity date of this instrument is 9 November 2026.
7 AMP Notes 3 are floating rate subordinated unsecured notes issued on 15 November 2018 and mature on 15 November 2028. AMP has exercised
its right to redeem all of the Notes on 15 November 2023.
(b) Changes in liabilities arising from operating and financing activities
Balance at the beginning of the year
Cash flows
Other
Balance at the end of the year
2023
$m
28,962
(657)
77
28,382
2022
$m
26,117
2,753
92
28,962
111
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Notes to the financial statements
for the year ended 31 December 2023
3.2
Interest-bearing liabilities continued
3.3
Financial risk management continued
Accounting policy – recognition and measurement
(a) Market risk continued
Interest-bearing liabilities are initially recognised at fair value, net of transaction costs. They are subsequently measured
at amortised cost using the effective interest rate method.
It is AMP’s policy to hedge currency and interest rate risk arising on issued notes and subordinated debt. When fair value
hedge accounting is applied, the carrying amounts of borrowings and subordinated debt are adjusted for changes in fair value
related to the hedged risk for the period that the hedge relationship remains effective. Any changes in fair value for the period
are recognised in the Consolidated income statement. In cash flow hedge relationships, the borrowings are not revalued.
Finance costs include:
(i) borrowing costs:
•
interest on bank overdrafts, borrowings and subordinated debt;
• amortisation of discounts or premiums related to borrowings;
(ii) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment
to interest costs; and
(iii) changes in the fair value of derivative hedges together with any change in the fair value of the hedged assets or liabilities
that are designated and qualify as fair value hedges, foreign exchange gains and losses and other financing-related
amounts. Changes in the fair value of derivatives in effective cash flow hedges are recognised in the cash flow hedge
reserve. The accounting policy for derivatives is set out in note 3.4.
Finance costs are recognised as expenses when incurred.
3.3
Financial risk management
Financial risk arises from the holding of financial instruments and financial risk management (FRM) is an integral part of the AMP
group’s enterprise risk management framework. The AMP Limited Board has overall responsibility for the AMP group’s enterprise
risk management framework, including the approval of AMP’s strategic plan, risk management strategy and risk appetite.
This note discloses financial risk in accordance with the categories in AASB 7 Financial Instruments: Disclosures:
— market risk;
— liquidity and refinancing risk; and
— credit risk.
These risks are managed in accordance with the board-approved risk appetite statement and the individual policies for each
risk category.
(a) Market risk
Market risk is the risk that the fair value of assets and liabilities, or future cash flows of a financial instrument, will fluctuate
due to movements in financial markets, including interest rates, foreign exchange rates, equity prices, property prices, credit
spreads, commodity prices and other financial market variables.
The following table provides information on significant market risk exposures for the AMP group, which could lead to an impact
on the AMP group’s profit after tax and shareholders’ equity position, and the management of those exposures.
Market risk
Exposures
Management of exposures and use
of derivatives
The AMP group’s long-term
borrowings, subordinated debt and
investment held in interest-bearing
securities.
The AMP group interest rate risk is managed
by entering into interest rate swaps, which
have the effect of converting investments
or borrowings from fixed to floating rates.
Interest rate risk
The risk of an impact on the
AMP group’s profit after tax and
equity arising from fluctuations
in the fair value or future cash
flows of financial instruments due
to changes in market interest rates.
Interest rate movements could
result from changes in the
absolute levels of interest rates,
the shape of the yield curve, the
margin between yield curves and
the volatility of interest rates.
Currency risk
The risk of an impact on the AMP
group’s profit after tax and equity
arising from fluctuations of the fair
value of a financial asset, liability
or commitment due to changes
in foreign exchange rates.
AMP Bank’s interest rate risk from
mismatches in the repricing terms
of assets and liabilities (term risk)
and variable rate short-term
repricing bases (basis risk).
The AMP group’s defined benefit
plans exposures, both through the
fair value of plan assets (specifically
interest-bearing assets), as well
as the valuation of defined benefit
obligations (through changes
in the discount curve used for
actuarial valuations).
Foreign currency denominated
assets and liabilities.
Foreign equity accounted associates
and capital invested in overseas
operations.
Foreign exchange rate movements
on specific cash flow transactions.
The AMP group’s defined benefit
plans exposures, through the value
of unhedged exposures to plan asset
denominated in foreign currencies.
Equity price risk
The risk of an impact on the
AMP group’s profit after tax and
equity arising from fluctuations
in the fair value or future cash
flows of a financial instrument
due to changes in equity prices.
Exposure for shareholders includes
listed and unlisted shares, guarantee
liabilities and participation in equity
unit trusts.
The AMP group’s defined benefit
plans exposures, through the value
of exposures to plan asset held in
equities, or equity-like exposures.
AMP Bank uses natural offsets, interest
rate swaps and basis swaps to hedge the
mismatches within exposure limits. AMP
group’s Group Treasury team (Group
Treasury) manages the exposure in AMP
Bank by maintaining a net interest rate risk
position within the limits delegated and
approved by the AMP Bank Board.
The AMP group periodically reviews exposures
to interest rates arising from defined benefit
plans exposures, and considers the use
of derivatives in managing these exposures.
No derivatives were employed to manage
exposures to interest rates during the year
ended 31 December 2023.
The AMP group uses swaps to hedge the
foreign currency risk on foreign currency
denominated borrowings. The AMP
group utilises various hedging instruments
to hedge foreign currency risk arising
from certain investments denominated
in a foreign currency.
The AMP group hedges material foreign
currency risk originated by receipts and
payments once the value and timing of the
expected cash flow is known.
In addition, the AMP group will at times
pre-hedge any future (but not expected)
foreign currency receipts and payments,
subject to market conditions.
AMP group periodically reviews exposures
to foreign currencies arising from defined
benefit plans exposures, and considers
the use of derivatives in managing these
exposures. No derivatives were employed
to manage exposures to foreign currencies
during the year ended 31 December 2023.
Group Treasury may, with AMP group’s
Asset and Liability Committee (Group
ALCO) approval, use equity exposures
or equity futures or options to hedge other
enterprise-wide equity exposures.
AMP group periodically reviews exposures
to equities arising from defined benefit
plans exposures, and considers the use
of derivatives in managing these exposures.
No derivatives were employed to manage
exposures to equities during the year ended
31 December 2023.
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114
Notes to the financial statements
for the year ended 31 December 2023
3.3
Financial risk management continued
3.3
Financial risk management continued
(a) Market risk continued
Sensitivity analysis
The table below includes sensitivity analysis showing how the profit after tax and equity would have been impacted by changes
in market risk variables. The analysis:
— shows the direct impact of a reasonably possible change in market rates and is not intended to illustrate a remote, worst
case stress test scenario;
— assumes that all underlying exposures and related hedges are included and the change in variable occurs at the reporting
date; and
— does not include the impact of any mitigating management actions over the period to the subsequent reporting date.
The categories of risks faced and methods used for deriving sensitivity information did not change from previous years.
Sensitivity analysis
Interest rate risk
Change in variables
Impact of a 100 basis point
(bp) change in Australian and
international interest rates.
- 100bp
+100bp
2023
2022
Impact
on profit
after tax
increase/
(decrease)
$m
Impact
on equity 1
increase/
(decrease)
$m
Impact
on profit
after tax
increase/
(decrease)
$m
Impact
on equity 1
increase/
(decrease)
$m
2.3
(4.1)
3.8
(9.9)
1.0
(5.0)
(17.7)
10.3
Currency risk
Impact of a 10% movement
of exchange rates against the
Australian dollar on currency sensitive
monetary assets and liabilities.
Equity price risk
Impact of a 10% movement in
Australian and international equities.
Any potential impact on fees from
the AMP group’s investment-linked
business is not included.
10% depreciation of AUD
9.7
73.8
(63.5)
20.7
10% appreciation of AUD
(8.9)
(62.7)
27.5
(45.5)
10% increase in:
Australian equities
International equities
10% decrease in:
Australian equities
International equities
0.5
0.5
(1.3)
(1.4)
11.9
13.1
(12.7)
(14.0)
0.3
0.6
(0.5)
(0.5)
6.7
8.6
(6.9)
(8.5)
1
Includes both the impact on profit after tax as well as the impact of amounts that would be taken directly to equity in respect of the portion of
changes in the fair value of derivatives that qualify as cash flow hedges or net investment hedges for hedge accounting.
(b) Liquidity and refinancing risk
Risk
Liquidity risk
The risk that the AMP group is not able
to meet its obligations as they fall due
because of an inability to liquidate
assets or obtain adequate funding
when required.
Refinancing risk
The risk that the AMP group is not
able to refinance the full quantum
of its ongoing debt requirements
on appropriate terms and pricing.
Exposures
Management of exposures
The AMP group corporate debt
portfolio and AMP Bank retail
and wholesale funding sources.
Group Treasury maintains a defined
surplus of cash to mitigate refinancing
risk (for both AMP’s non-bank
corporate exposures and AMP Bank’s
specific exposures), satisfy regulatory
requirements and protect against
liquidity shocks in accordance with
the requirements of the AMP Group
Liquidity Policy. This policy is reviewed
and endorsed by Group ALCO and
approved by the AMP Limited Board.
(b) Liquidity and refinancing risk continued
Maturity analysis
Below is a summary of the maturity profiles of AMP’s undiscounted financial liabilities and off-balance sheet items at the
reporting date, based on contractual undiscounted repayment obligations. Repayments that are subject to notice are treated
as if notice were to be given immediately.
Over 5
years
$m
Not
specified
$m
2023
Non-derivative financial liabilities
Payables
Borrowings 1
Lease liabilities
Subordinated debt 2
Guarantee liabilities
Derivative financial instruments
Options
Interest rate swaps
Foreign currency forward contract
Total return swaps
Futures
Off-balance sheet items
Credit-related commitments – AMP Bank 3
Investment commitments
Total undiscounted financial liabilities and
off-balance sheet items
2022
Non-derivative financial liabilities
Payables
Borrowings 1
Lease liabilities
Subordinated debt 2
Guarantee liabilities
Derivative financial instruments
Options
Interest rate swaps
Cross currency swaps
Foreign currency forward contract
Off-balance sheet items
Credit-related commitments – AMP Bank 3
Investment commitments
Total undiscounted financial liabilities and
off-balance sheet items
Up to 1
year
$m
185
24,062
69
42
–
4
15
2
14
1
3,576
–
1 to 5
years
$m
–
4,301
279
596
–
–
26
–
–
–
–
–
–
504
368
–
–
–
54
–
–
–
–
–
27,970
5,202
926
209
23,681
68
51
–
20
12
4
9
3,464
–
–
4,292
277
432
–
–
50
–
–
–
–
–
44
438
535
–
–
66
–
–
–
–
Total
$m
185
28,867
716
638
32
4
95
2
14
1
3,576
18
34,148
209
28,017
783
1,018
64
20
128
4
9
3,464
81
–
–
–
–
32
–
–
–
–
–
–
18
50
–
–
–
–
64
–
–
–
–
–
81
1 Borrowings include AMP Bank deposits.
2 Includes AMP Bank subordinated debt and AMP Capital Notes 2 (2022: It included AMP Bank subordinated debt, AMP Capital Notes 2
and AMP Notes 3).
3 Credit-related loan commitments are off-balance sheet as they relate to unexercised commitments to lend to customers of AMP Bank.
27,518
5,051
1,083
145
33,797
115
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116
Notes to the financial statements
for the year ended 31 December 2023
3.3
Financial risk management continued
3.3
Financial risk management continued
(c) Credit risk
Credit risk management is decentralised in business units within AMP, with the exception of credit risk directly and indirectly
impacting shareholder capital, which is measured and managed on an aggregate basis by Group Treasury at the AMP group
level and reported to Group ALCO.
Risk
Credit risk
Credit default risk is the risk of
financial or reputational loss due
to a counterparty failing to meet
their contractual commitments
in full and on time.
Concentration of credit risk arises
when a number of financial
instruments or contracts are
entered into with the same
counterparty or where a number
of counterparties are engaged
in similar business activities that
would cause their ability to meet
contractual obligations to be
similarly affected by changes
in economic or other conditions.
Exposures
Wholesale credit risk, arising from
corporate investments held in relation
to the management of liquidity.
Credit risk arising from the AMP
group’s Australian banking activities
which are predominantly related
to residential mortgage lending and
business finance loans.
Management of exposures and use
of derivatives
Wholesale credit risk exposures arising
from corporate investments made in
relation to the management of liquidity
(and related activities, including hedging
financial risks) are managed by Group
Treasury in accordance with the AMP
Group Aggregate Risk Exposures and
Intra-Group Transaction Exposure Policy.
This policy is reviewed and endorsed
by the AMP Group ALCO and approved
by the AMP Limited Board.
Wholesale credit risk exposures arising
from investments made in relation to
the management of liquidity within AMP
Bank (and related activities, including
hedging financial risks) are managed
by Group Treasury in accordance with
the AMP Bank Wholesale Counterparty
Credit Risk Policy. This policy is reviewed
and endorsed by the AMP Bank ALCO
and approved by the AMP Bank Limited
Board. Specific detail relating to the
credit risk management of the AMP Bank
loan portfolio is outlined below.
The AMP Group Large Exposures & Credit Concentration Risk Standard sets out the assessment and determination of what
constitutes credit concentration risk. The policy sets exposure limits based on each counterparty’s credit rating (unless
special considerations are defined). Additional limits are set for the distribution of the total portfolio by credit rating bands.
Compliance with this policy is monitored and exposures and breaches are reported to senior management and the AMP
Board Risk Committee through periodic financial risk management reports.
Group Treasury may also enter into credit default swaps to hedge concentration risk against material exposures.
The exposures on interest-bearing securities and cash equivalents which impact AMP’s capital position are managed by Group
Treasury within limits set by the AMP Group Wholesale Counterparty Credit Risk Policy.
Impairment assessment
Definition of default
AMP Bank considers a financial asset defaulted and hence Stage 3 impaired when payment is 90 days past due or when there
is no longer reasonable assurance that principal or interest will be collected in their entirety on a timely basis.
AMP Bank’s internal risk grading and PD estimation process
AMP Bank’s credit risk management department runs expected credit loss models for the residential mortgage book as well
as the business finance loans. The Bank’s residential mortgage book is a portfolio with a low number of defaults. In recent
times, the Bank’s residential mortgage book has grown significantly, and a larger history of default data has been captured.
This has enabled the Bank to successfully develop its internal behavioural scorecards which have been used to replace the
benchmark PDs to better stratify the portfolio by credit risk worthiness.
Internal risk grades for the residential mortgage book are as follows:
Internal credit rating grade
Internal credit rating grade description
Performing
Not in arrears in the past six months
Past due but not impaired
Accounts in arrears but have not been past 90 days in the last six months
Impaired
90 days past due over the last six months
(c) Credit risk continued
For business finance loans a probability of default risk grade model is applied that includes weighted risk factors such as interest
coverage ratio, revenue growth, licence compliance rating, experience in business and arrears levels. Practices on watch-list are
also downgraded. Credit judgement may be applied to arrive at the final risk grade.
Internal risk grades for business finance loans are as follows:
Internal risk grade
Internal risk grade description
Broadly corresponds with Standard & Poor ratings of
A to H
I
Sub-investment grade
BB+ to CCC
Impaired
D
AMP Bank’s interbank and financial institutions exposures, as well as exposures to interest-bearing securities, are based on the
external credit rating of the counterparties as follows:
Internal risk grade description
Broadly corresponds with Standard & Poor ratings of
Senior investment grade
Investment grade
Sub-investment grade
AAA to A-
BBB+ to BBB-
BB+ up to but not including defaulted or impaired
Exposure at default (EAD)
EAD is modelled by applying assumptions in relation to the amortisation of the loans based on scheduled principal and interest
repayments, except for Stage 3 loans.
Loss given default (LGD)
For the residential mortgage portfolio, the key driver for the LGD calculation is the value of the underlying property since,
in a foreclosure scenario, the proceeds from the sale of a property are secured by AMP Bank to repay the loan. The value
of the underlying residential property is captured via the LVR, which applies both the changes in loan balance and estimated
value of the collateral using market data and indices. Both floor and haircuts are applied to provide for model risk.
For business finance loans, the LGD is calculated via assumptions to the reduction in valuations of practices (being a multiple
of their recurring cash flows) in the event of default, such as client run-off or deterioration in valuation due to compliance issues.
In addition, haircuts are applied to capture the volatility observed in the register values in the event of default but also general
volatility in valuations over time.
Grouping of financial assets for expected credit losses (ECL) calculation
AMP Bank calculates ECL on an individual basis on all Stage 3 assets, and interbank and debt securities measured at FVOCI.
For all other asset classes ECL is calculated on a collective basis, taking into account risk factors for each loan to calculate
the ECL estimate and then aggregating the estimated number for each relevant portfolio.
Forward-looking information
AMP Bank’s ECL model incorporates a number of forward-looking macroeconomic factors (MEF) that are reviewed
on a quarterly basis and approved by the Credit Risk Committee (CRC). The MEF include unemployment, property prices,
ASX All Ordinaries index and Reserve Bank of Australia cash rate.
At least three different scenarios with fixed weightings are used in the model. The weightings are reviewed on an annual basis.
The ECL is calculated as the probability weighted average of the provision calculated for each economic scenario.
Management overlay
Management overlay is required to mitigate model risk and any systemic risk that is not recognised by the model.
The management overlays are reviewed on an annual basis or more frequently if required and presented to the CRC and
Board Audit Committee (BAC) for endorsement.
Write-offs
Financial assets are written off either partially or in their entirety only when there is no reasonable expectation of recovery.
Recovery actions can cease if they are determined as being no longer cost effective or in some situations where the customers
have filed for bankruptcy.
Credit risk of the loan portfolio in AMP Bank
AMP Bank is predominantly a lender for residential properties for both owner occupied and investment purposes. In relation
to each loan application, AMP Bank completes a credit assessment, including cost of living expense assessment, and requires
valuation of the proposed security property.
AMP Bank’s CRC and Board Risk Committee (BRC) oversee trends in lending exposures and compliance with the risk appetite
statement. AMP Bank secures its housing loans with mortgages over relevant properties and as a result, manages credit risk
on its loans with conservative lending policies and particular focus on the LVR. The LVR is calculated by dividing the total loan
117
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118
Notes to the financial statements
for the year ended 31 December 2023
3.3
Financial risk management continued
3.4
Derivatives and hedge accounting
(c) Credit risk continued
amount outstanding by the lower of AMP Bank’s approved valuation amount or the purchase price. Loans with LVR greater
than 80% are fully mortgage insured. Mortgage insurance is provided by Genworth Mortgage Insurance Australia Ltd and
QBE Lenders Mortgage Insurance Ltd, who are regulated by APRA. AMP Bank has strong relationships with both insurers and
has experienced minimal levels of historic claim rejections and reductions.
The average LVR at origination of AMP Bank’s loan portfolio for existing and new business is set out in the following table:
LVR %
0 – 50
51 – 60
61 – 70
71 – 80
81 – 90
91 – 95
> 95
Existing
business
2023
%
New
business
2023
%
Existing
business
2022
%
New
business
2022
%
20
14
20
36
8
1
1
22
13
16
39
8
2
–
18
13
20
37
10
1
1
14
11
15
49
8
3
–
Renegotiated loans
Where possible, AMP Bank seeks to restructure loans for borrowers seeking hardship relief rather than take possession
of collateral. This may involve capitalising interest repayments for a period and increasing the repayment arrangement for the
remaining term of the loan. Once the terms have been renegotiated, the loan is no longer considered past due or an impaired
asset unless it was greater than 90 days in arrears in the previous six months or a specific provision has been raised for the
loan. AMP Bank assisted customers by renegotiating $155m (2022: $81m) of loans during the year.
Collateral and master netting or similar agreements
The AMP group obtains collateral and utilises netting agreements to mitigate credit risk exposures from certain counterparties.
(i) Derivative financial assets and liabilities
The credit risk of derivatives is managed in the context of the AMP group’s overall credit risk policies and includes the use
of Credit Support Annexes to derivative agreements which facilitate the bilateral posting of collateral as well as the clearing
of derivative positions on the London Clearing House.
Certain derivative assets and liabilities are subject to legally enforceable master netting arrangements, such as an International
Swaps and Derivatives Association (ISDA) master netting agreement. In certain circumstances, for example when a credit event
such as a default occurs, all outstanding transactions under an ISDA agreement are terminated, the termination value is assessed
and only a single net amount is payable in settlement of all transactions.
An ISDA agreement does not automatically meet the criteria for offsetting in the Consolidated statement of financial position.
This is because the AMP group, in most cases, does not have any current legally enforceable right to offset recognised amounts.
If these netting arrangements were applied to the derivative portfolio, the derivative assets of $323m would be reduced
by $35m to the net amount of $288m and derivative liabilities of $116m would not be reduced (2022: derivative assets of $575m
would be reduced by $213m to the net amount of $362m and derivative liabilities of $161m would be reduced by $4m to the net
amount of $157m).
(ii) Other collateral
The AMP group has collateral arrangements in place with some counterparties in addition to collateral deposits held with respect
to repurchase agreements. The amount and type of collateral required by AMP Bank on housing loans depends on an assessment
of the credit risk of the counterparty. Guidelines are in place covering the acceptability and valuation of each type of collateral.
AMP Bank holds collateral against its loans and advances primarily in the form of mortgage interests over property, other
registered securities over assets and guarantees.
Management monitors the market value of collateral and will request additional collateral in accordance with the underlying
agreement. In the event of customer default, AMP Bank can enforce any security held as collateral against the outstanding claim.
Any loan security is usually held as mortgagee in possession while AMP Bank seeks to realise its value through the sale of the
property. Therefore, AMP Bank does not hold any real estate or other assets acquired through the repossession of collateral.
Collateral generally consists of 11am loans and deposits and is exchanged between the counterparties to reduce the exposure
from the net fair value of derivative assets and liabilities between the counterparties. As at 31 December 2023, there was $63m
(2022: $133m) of collateral deposits (due to other counterparties) and $43m (2022: $108m) of collateral loans (due from other
counterparties) relating to derivative assets and liabilities.
The group is exposed to certain risks relating to its ongoing business operations. To mitigate the risks, the group uses derivative
financial instruments, such as cross-currency swaps and interest rate swaps. When the group designates certain derivatives
to be part of a hedging relationship, and they meet the criteria for hedge accounting, the hedges are classified as:
— cash flow hedges;
— fair value hedges; or
— net investment hedges.
Derivative financial instruments are held for risk and asset management purposes only and not for the purpose of speculation.
Not all derivatives held are designated as hedging instruments. The group’s risk management strategy and how it is applied
to manage risk is explained further in note 3.3.
(a) Hedging instruments
The following table sets out the notional amount of derivative instruments designated in a hedge relationship by relationship
type as well as the related carrying amounts.
2023
Hedge type
Cash flow
Hedging instrument
Interest rate swaps
Fair value and cash flow
Cross-currency interest rate swaps
Net investment
Total
2022
Hedge type
Cash flow
Foreign currency forward contract
Hedging instrument
Interest rate swaps
Fair value and cash flow
Cross-currency interest rate swaps
Net investment
Total
(b) Hedged items
Foreign currency forward contract
Notional
amount
$m
Fair value
assets
Fair value
liabilities
$m
$m
16,726
191
631
17,548
18,050
553
634
19,237
148
26
15
189
337
31
3
371
–
–
–
–
–
–
6
6
The following table sets out the carrying amounts of hedged items in fair value hedge relationships, and the accumulated
amount of fair value hedge adjustments in these carrying amounts. The group does not always hedge its entire exposure
to a class of financial instruments, therefore the carrying amounts below do not always equal the total carrying amounts
disclosed in other notes.
2023
Medium Term Notes
2022
Medium Term Notes
Carrying amount
of hedged items
Accumulated amount of fair
value adjustments on the
hedged items
Assets
Liabilities
Assets
Liabilities
$m
–
$m
218
$m
–
$m
26
–
584
–
31
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Notes to the financial statements
for the year ended 31 December 2023
3.4
Derivatives and hedge accounting continued
3.4
Derivatives and hedge accounting continued
Fair value hedge relationships resulted in the following changes in the values used to recognise hedge ineffectiveness for the year:
Accounting policy – recognition and measurement
(Loss)/gain on hedging instrument
Gain/(loss) on hedged items attributable to the hedged risk
Gain/(loss) after ineffectiveness
2023
$m
(4)
5
1
2022
$m
11
(14)
(3)
Derivative instruments accounted for as cash flow hedges
The group is exposed to variability in future interest cash flows on non-trading assets and liabilities which bear interest at fixed
and variable rates. The group uses interest rate swaps to manage interest rate risks and many of the swaps are cash flow hedges
for accounting purposes.
Methods used to test hedge effectiveness and establish the hedge ratio include regression analysis and for some portfolio
hedge relationships, a comparison to ensure the expected interest cash flows from the portfolio exceed those of the hedging
instruments. The main potential source of hedge ineffectiveness from cash flow hedges is mismatches in the terms of hedged
items and hedging instruments, for example the frequency and timing of when interest rates are reset.
During the year, the AMP group recognised $nil (2022: $nil) due to ineffectiveness on derivative instruments designated as cash
flow hedges.
Derivative instruments accounted for as fair value hedges
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value exclusive of any transaction costs on the date a derivative
contract is entered into and are subsequently remeasured to their fair value at each reporting date. Derivatives are recognised
as assets when their fair values are positive and as liabilities when their fair values are negative. Any gains or losses arising
from changes in the fair values of derivatives, except those that qualify as effective hedges, are immediately recognised in the
Consolidated income statement.
Hedge accounting
AMP continues to apply the hedge accounting requirements under AASB 139 Financial instruments: Recognition and Measurement.
Cash flow hedges
The effective portion of changes in the fair value of cash flow hedges is recognised (including related tax impacts) in the
Consolidated statement of comprehensive income. The ineffective portion is recognised immediately in the Consolidated income
statement. The balance of the cash flow hedge reserve in relation to each particular hedge is transferred to the Consolidated
income statement in the period when the hedged item affects profit or loss. Hedge accounting is discontinued when a hedging
instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting. The cumulative
gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in the Consolidated income statement. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately transferred to the Consolidated income statement.
Fair value hedges are used to protect against changes in the fair value of financial assets and financial liabilities due to movements
in exchange rates and interest rates.
Fair value hedges
Hedge effectiveness is assessed by comparing the overall changes in the fair value of the hedging instrument against the
changes in the fair value of the hedged items attributable to the hedged risks. The main potential source of ineffectiveness
on fair value hedges is currency basis spread, which is included in the valuation of the hedging instrument but excluded from
the value of the hedged item.
Hedges of net investments in foreign operations
The group hedges its exposure to changes in exchange rates on the value of its foreign currency denominated strategic
partnerships. Hedge effectiveness is assessed based on the overall changes in the fair value of the forward contract,
primarily using the cumulative dollar offset method.
During the year, the AMP group recognised $nil (2022: $nil) due to the ineffective portion of hedges relating to strategic
investments in foreign operations.
The following table sets out the maturity profile of derivative instruments in a hedge relationship.
2023
Interest rate swaps
Cross-currency interest rate swaps
Foreign currency forward contract
Total
2022
Interest rate swaps
Cross-currency interest rate swaps
Foreign currency forward contract
Total
0 to 3
months
$m
2,925
–
62
2,987
1,547
–
256
1,803
3 to 12
months
$m
7,820
191
569
8,580
8,141
302
378
8,821
1 to 5
years
$m
3,642
–
–
Over 5
years
$m
2,339
–
–
Total
$m
16,726
191
631
3,642
2,339
17,548
6,455
251
–
6,706
1,907
18,050
–
–
553
634
1,907
19,237
Changes in the fair value of fair value hedges are recognised in the Consolidated income statement, together with any
changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. If a hedge no longer meets
the criteria for hedge accounting, the cumulative gains and losses recognised on the hedged item will be amortised over the
remaining life of the hedged item.
Net investment hedges
The effective portion of changes in the fair value of net investment hedges is recognised (including related tax impacts) in the
Consolidated statement of comprehensive income. Any ineffective portion is recognised immediately in the Consolidated
income statement. The cumulative gain or loss existing in equity remains in equity until the foreign investment is disposed of.
3.5
Capital management
AMP holds capital to protect customers, creditors and shareholders against unexpected losses. There are a number of ways
AMP assesses the adequacy of its capital position. Primarily, AMP aims to:
— maintain a sufficient surplus above minimum regulatory capital requirements (MRR) to reduce the risk of technical
insolvency; and
— maintain the AMP group’s credit rating.
These factors are balanced when forming AMP’s risk appetite as approved by the AMP Limited Board.
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Notes to the financial statements
for the year ended 31 December 2023
3.5
Capital management continued
Calculation of capital resources
The AMP group’s eligible capital resources include ordinary equity and certain hybrid capital instruments less intangibles,
equity investments and other assets required to be removed by regulation.
The table below shows the AMP group’s capital resources at reporting date:
AMP statutory equity attributable to shareholders of AMP Limited
Accounting mismatch and other adjustments 1
AMP shareholder equity
Goodwill and other intangibles 2
Equity investments 3
Other regulatory adjustments 4
Level 3 eligible capital
Eligible hybrid capital resources 5
Total eligible capital resources
Minimum regulatory requirements (MRR)
Target capital requirements
Total capital requirements
Group surplus capital
2023
$m
3,874
(80)
3,794
(209)
(803)
(390)
2,392
134
2,526
1,425
536
1,961
565
2022
$m
4,171
(94)
4,077
(289)
(1,012)
(138)
2,638
350
2,988
1,366
699
2,065
923
1 Accounting mismatches and other adjustments relate to the net assets of AMP Foundation and surpluses recognised on defined benefit plans.
2 For the year ended 31 December 2023, no goodwill and other intangibles have been classified as assets held for sale on the Consolidated
statement of financial position (2022: $91m).
3 Equity investments relate to holdings of associate equity investments where AMP holds a minority interest. As at 31 December 2023, no equity
investments have been classified as assets held for sale on the Consolidated statement of financial position (2022: Global Infrastructure Fund
Sponsor ($76m), Global Infrastructure Fund II ($122m), AMP Capital Core Property Fund ($30m) and other equity investments ($14m)).
4 Other regulatory adjustments relate to securitisation, deferred tax assets and other deductions.
5 Eligible hybrid capital instruments relate to subordinated debt, which is able to be included as eligible capital for the purpose of meeting
minimum regulatory requirements.
Capital requirements
A number of the operating entities within the AMP group are regulated and are required to meet MRR. In certain circumstances,
APRA or other regulators may require AMP and other entities of the AMP group to hold a greater level of capital to support its
business and/or restrict the amount of dividends that can be paid by them. Any such adjustments would be incorporated into
the MRR and monitored as part of the capital management policy.
The principal minimum regulatory capital requirements for AMP’s businesses are:
Operating entity
Minimum regulatory capital requirement
AMP Bank Limited (AMP Bank)
Capital requirements as specified under the APRA ADI Prudential Standards
N. M. Superannuation Proprietary Limited
Operational Risk Financial Requirements as specified under the APRA
Superannuation Prudential Standards
Other ASIC regulated businesses
Capital requirements under AFSL requirements
AMP maintains capital targets reflecting its material risks (including financial risk, product risk and operational risk) and risk
appetite as approved by the AMP Limited and AMP Bank Boards. The target capital requirement is the level of surplus capital
that AMP seeks to carry to reduce the risk of breaching MRR. Other components of AMP’s capital targets include amounts
relating to group investments, defined benefit funds and other operational risks.
4
Section
Employee disclosures
This section provides details on the various programs the AMP group uses to reward and recognise
employees, including key management personnel.
4.1 Defined benefit plans
4.2 Share-based payments
4.1
Defined benefit plans
AMP contributes to defined benefit plans which provide benefits to employees, and their dependants, on resignation,
retirement, disability or death of the employee. The benefits are based on years of service and an average salary calculation.
All defined benefit plans are now closed to new members.
The characteristics and risks associated with each of the defined benefit plans are described below:
Plan details
Plan names
Entitlements of active
members
Governance of the plans
Australia
New Zealand
AMP Australia Plan I and AMP Australia Plan II.
AMP New Zealand Plan I and AMP
New Zealand Plan II.
A lump sum or pension on retirement.
Pensions provided are lifetime
indexed pensions with a reversionary
spouse pension.
The plans’ trustees – this includes
administration of the plan, management
and investment of the plan assets,
and compliance with superannuation
laws and other applicable regulations.
A lump sum or pension on retirement. For
those who elect for a pension, the plan also
provides for a spouses’ pension.
The plans’ trustees – this includes
administration of the plan, management
and investment of the plan assets, and
looking after the interests of all beneficiaries.
Valuations required
Every year.
Every three years.
Key risks
The risk of actual outcomes being different to the actuarial assumptions used to estimate the
defined benefit obligation, investment risk and legislative risk.
Date of last valuation
31 March 2023.
31 December 2020.
Additional recommended
contributions
No additional contributions are required
until the 31 March 2024 valuation
is completed.
No additional contributions are required
until the 31 December 2023 valuation
is completed.
(a) Defined benefit (liability)/asset
Present value of wholly-funded defined benefit obligations
Fair value of plan assets
Defined benefit (liability)/asset recognised in the Consolidated statement of financial position
Movement in defined benefit (liability)/asset
Defined benefit asset recognised at the beginning of the year
Plus: Total expenses recognised in the Consolidated income statement
Plus: Employer contributions
Plus: Foreign currency exchange rate changes
Plus: Actuarial losses recognised in the Consolidated statement of comprehensive income 1
Defined benefit (liability)/asset recognised at the end of the year
2023
$m
(677)
676
(1)
12
(2)
–
1
(12)
(1)
2022
$m
(645)
657
12
3
(1)
10
1
(1)
12
1 The cumulative net actuarial gains and losses recognised in the Statement of comprehensive income is a $186m gain (2022: $198m gain).
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Notes to the financial statements
for the year ended 31 December 2023
4.1
Defined benefit plans continued
4.1
Defined benefit plans continued
(b) Reconciliation of the movement in the defined benefit (liability)/asset
(e) Allocation of assets
Defined benefit obligation
Fair value of plan assets
The asset allocations of the defined benefit funds are shown in the following table:
Balance at the beginning of the year
Current service cost
Interest (expense)/income
Net actuarial (losses)/gains
Employer contributions
Foreign currency exchange rate changes
Benefits paid
Balance at the end of the year
2023
$m
(645)
(1)
(27)
(56)
–
1
51
2022
$m
(782)
(1)
(5)
89
–
3
51
(677)
(645)
2023
$m
657
–
26
44
–
–
(51)
676
2022
$m
785
–
5
(90)
10
(2)
(51)
657
(c) Analysis of defined benefit (deficit)/surplus by plan
AMP Australia Plan I
AMP Australia Plan II
AMP New Zealand Plan I
AMP New Zealand Plan II
Total
Fair value
of plan assets
Present value
of plan obligation
Net recognised
(deficit)/surplus
Actuarial (losses)/gains
2023
$m
247
344
13
72
676
2022
$m
240
331
13
73
657
2023
$m
(260)
(318)
(15)
(84)
(677)
2022
$m
(248)
(294)
(16)
(87)
(645)
2023
$m
2022
$m
2023
$m
2022
$m
(13)
26
(2)
(12)
(1)
(8)
37
(3)
(14)
12
(5)
(11)
1
3
(12)
–
(7)
–
6
(1)
(d) Principal actuarial assumptions
The following table sets out the principal actuarial assumptions used as at the reporting date in measuring the defined benefit
obligations of the Australian and New Zealand defined benefit funds:
AMP Plan I
AMP Plan II
Australia
New Zealand
Australia
New Zealand
2023
%
5.1
n/a
2022
%
5.7
n/a
2023
%
4.5
n/a
2022
%
4.6
n/a
2023
%
5.3
2.8
2022
%
5.8
2.8
2023
%
4.5
3.0
2022
%
4.6
3.0
Weighted average discount
rate
Expected rate of salary
increases
AMP Plan I
AMP Plan II
Australia
New Zealand
Australia
New Zealand
2023
%
2022
%
2023
%
2022
%
2023
%
2022
%
2023
%
2022
%
58
20
14
3
5
43
37
9
4
7
46
40
–
14
–
47
38
–
15
–
58
20
14
3
5
19
51
7
9
14
46
40
–
14
–
47
38
–
15
–
Equity
Fixed interest
Property
Cash
Other
(f) Sensitivity analysis
The defined benefit obligation has been recalculated for each scenario by changing only the specified assumption as outlined
below, whilst retaining all other assumptions as per the base case. The table below shows the increase/(decrease) for each
assumption change. Where an assumption is not material to the fund it has been marked as n/a.
2023
Assumption
Discount rate (+/- 0.5%) 1
Pensioner indexation
assumption (0.5%) 2
Pensioner mortality assumption
(10%)
Life expectancy (additional 1
year)
2022
Discount rate (+/- 0.5%) 1
Pensioner indexation
assumption (0.5%) 2
Pensioner mortality assumption
(10%)
Life expectancy (additional 1
year)
AMP Plan I
AMP Plan II
Australia
New Zealand
Australia
New Zealand
(+)
$m
(11)
14
(-)
$m
13
(11)
(+)
$m
n/a
(-)
$m
1
1
n/a
(+)
$m
(15)
15
(-)
$m
17
(14)
(+)
$m
n/a
(-)
$m
8
7
n/a
n/a
10
n/a
n/a
n/a
7
n/a
n/a
n/a
n/a
1
n/a
n/a
n/a
2
n/a
(11)
12
n/a
n/a
12
(11)
n/a
1
8
n/a
n/a
1
1
n/a
n/a
n/a
(14)
14
n/a
n/a
15
(13)
n/a
8
6
n/a
n/a
2
9
n/a
n/a
n/a
1
(+/- 1%) discount rate applied to AMP New Zealand Plan I and II.
2 1% indexation increase applied to AMP New Zealand Plan I and II.
(g) Expected contributions and maturity profile of the defined benefit obligation
Expected employer contributions
Weighted average duration of the defined benefit
obligation (years)
AMP Plan I
AMP Plan II
Australia
New Zealand
Australia
New Zealand
$m
–
8
$m
–
7
$m
–
11
$m
–
10
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Notes to the financial statements
for the year ended 31 December 2023
4.1
Defined benefit plans continued
4.2
Share-based payments
Accounting policy – recognition and measurement
Defined benefit plans
The AMP group recognises the net deficit or surplus position of each fund in the Consolidated statement of financial position.
The deficit or surplus is measured as the difference between the fair value of the funds’ assets and the discounted defined
benefit obligations of the funds, using discount rates determined with reference to market yields on high quality corporate
bonds at the end of the reporting period.
After taking into account any contributions paid into the defined benefit funds during the year, movements in the net surplus
or deficit of each fund, except actuarial gains and losses, are recognised in the Consolidated income statement. Actuarial
gains and losses arising from experience adjustments and changes in actuarial assumptions over the year and the returns
on plan assets are recognised (net of tax) directly in retained earnings through Other comprehensive income.
Contributions paid into defined benefit funds are recognised as reductions in the deficit.
Critical accounting estimates and judgements
Defined benefit obligations
The value of the group’s defined benefit obligations are outputs of actuarial models dependent on
a number of underlying assumptions. Management applies judgement in selecting the assumptions used.
Key assumptions include:
— discount rate;
— expected future salary increases;
— pension indexation;
— mortality; and
— life expectancy.
AMP has multiple employee share-based payment plans. Share-based payment plans help create alignment between employees
participating in those plans (participants) and shareholders. Information on plans which AMP currently offers is provided below.
The following table shows the expense recorded for AMP share-based payment plans during the year:
Plans currently offered
Performance rights 1
Share rights and restricted shares - equity settled
Share rights – cash settled
Total share-based payments expense
2023
$'000
4,696
4,023
–
8,719
2022
$'000
6,457
4,259
680
11,396
1
Non-market performance rights which were forfeited or where performance conditions were not met were reversed during the year.
Accounting policy – recognition and measurement
Equity-settled share-based payments
The cost of equity-settled share-based payments is measured using their fair value at the date on which they are granted.
The fair value calculation takes into consideration a number of factors, including the likelihood of achieving market-based
vesting conditions such as total shareholder return (market conditions).
The cost of equity-settled share-based payments is recognised in the Consolidated income statement, together with
a corresponding increase in the share-based payment reserve (SBP reserve) in equity, over the vesting period of the instrument.
At each reporting date, the AMP group reviews its estimates of the number of instruments that are expected to vest and any
changes to the cost are recognised in the Consolidated income statement and the SBP reserve, over the remaining vesting period.
Where the terms of an equity-settled share-based payment are modified and the expense increases as a result of the modification,
the increase is recognised over the remaining vesting period. When a modification reduces the expense, there is no adjustment,
and the pre-modification cost continues to be recognised.
Where an equity-settled award does not ultimately vest, expenses are not reversed; except for awards where vesting is conditional
upon a non-market condition, in which case all expenses are reversed in the period in which the instrument lapses.
Cash-settled share-based payments
Cash-settled share-based payments are recognised when the terms of the arrangement provide AMP with the discretion
to settle in cash or by issuing equity instruments, and it has a present obligation to settle the arrangement in cash. A present
obligation may occur where the past practice has set a precedence for future settlements in cash.
Cash-settled share-based payments are recognised over the vesting period of the award in the Consolidated income
statement, together with a corresponding liability. The fair value is measured on initial recognition and re-measured at each
reporting date up to and including the settlement date, with any changes in fair value recognised in the Consolidated income
statement. Similar to equity-settled awards, the number of instruments expected to vest are reviewed at each reporting date
and any changes are recognised in the Consolidated income statement and as a corresponding movement in liability. The fair
value is determined using appropriate valuation techniques.
(a) Performance rights
The Chief Executive Officer (CEO) and Executive Committee members receive their long-term incentive (LTI) award in the form
of performance rights. This is intended to ensure the interests of those executives, who are able to most directly influence
company performance, are appropriately aligned with the interests of shareholders.
127
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128
Notes to the financial statements
for the year ended 31 December 2023
4.2
Share-based payments continued
4.2
Share-based payments continued
(a) Performance rights continued
(a) Performance rights continued
Plan
Long-term Incentive (LTI) Awards
CEO Sign-on Performance Rights Award
Overview
Performance rights give the participant
the right to acquire one fully paid ordinary
share in AMP Limited upon meeting specific
performance hurdles. They are granted at no
cost to the participant and carry no dividend
or voting rights until they vest. Upon vesting,
the performance rights convert to restricted
shares, which are subject to further restriction
periods. This award may be settled through
an equivalent cash payment, at the discretion
of the board.
As part of the CEO’s incentive package,
performance rights were awarded on
appointment. The performance rights give the
CEO the right to acquire one fully paid ordinary
share in AMP Limited (per right) upon meeting
specific performance conditions, including
hurdles that are subject to an absolute and
relative Total Shareholder Return (TSR) measure.
The award was granted at no cost to the CEO
and carries no dividend or voting rights. This
award may be settled through an equivalent
cash payment, at the discretion of the board.
Years granted
2021, 2022 and 2023
2021
The vesting of the CEO’s sign-on performance
rights is subject to the following performance
hurdles and gateways:
1. Absolute TSR – measures the CAGR
in the Company’s TSR over the relevant
Performance Period.
2. Relative TSR – measures the Company’s TSR
performance relative to a peer group over the
relevant Performance Period. The comparator
group for the relative TSR performance hurdle
will be an adjusted ASX100 Financials index.
Each component was awarded in three
tranches. The first tranche of each component
vested in 2021, and the second tranche
of each component lapsed during 2023
due to not meeting the minimum threshold
for performance. The board will test the
performance hurdles for the final tranche
of each component on or around 22 November
2024. If the performance hurdles are met,
the rights will vest and become exercisable.
Vesting conditions/
period
The vesting of performance rights under the
2021 and 2022 LTI awards is subject to:
— Relative TSR: which measures the
Compound Annual Growth Rate (CAGR)
or CAGR in the Company’s TSR relative
to CAGR in TSR to the peer group of ASX100
financial companies (excluding A-REITs)
over the relevant Performance Period.
Any performance rights that vest are subject
to a further one-year restriction period.
The vesting of performance rights under the
2023 LTI award is subject to:
— Relative TSR (35% of award): measures
AMP’s CAGR TSR relative to a peer
group of ASX 200 financial companies
(excluding A-REITs) over a three year
Performance Period.
— Adjusted Earnings Per Shares (EPS) (35%
of award): measures AMP’s CAGR in
AMP’s adjusted EPS over a three year
Performance Period.
— Reputation (30% of award): measures
AMP’s RepTrak score performance relative
to a comparator group which is based
on a subset of 15 organisations positioned
similarly to AMP in RepTrak’s Benchmark 60
index, over a three year Performance Period.
Any performance rights that vest are subject
to further restriction periods of up to three
years in the case of the CEO and up to an
additional two years for the other Executive
Committee members.
Risk and Conduct
Gateway
All equity plans are subject to a Risk and Conduct Gateway – if a participant’s performance and
conduct is not in line with AMP’s expectations, the board has discretion to amend the number
of units granted and/or the vesting outcome in line with the board’s adjustment guidelines.
Plan
Long-term Incentive (LTI) Awards
CEO Sign-on Performance Rights Award
Unvested awards
If a participant is terminated for cause or gives notice of resignation before the vesting date,
all unvested rights will lapse or be forfeited, unless the board determines otherwise.
If a participant’s employment ends for any other reason, the unvested awards will remain on foot.
For the CEO sign-on performance rights and the 2022 and 2023 LTI awards, a pro rata portion
of rights are retained. All unreleased restricted shares allocated to the participant on vesting will
remain on foot until the end of the restriction period, unless the participant is terminated for cause,
in which case the awards are forfeited.
Valuation of performance rights
The values for performance rights are based on valuations prepared by an independent external consultant. The valuations
are based on the 10-day volume weighted average share price over the 10-day trading period prior to the start of the award’s
valuation period. Assumptions regarding the dividend yield and volatility have been estimated based on AMP’s dividend yield
and volatility over an appropriate period.
In determining the share-based payments expense, the number of instruments expected to vest has been adjusted to reflect
the number of employees expected to remain with AMP until the end of the performance period; this is revisited each reporting
date. The following table shows the factors and range considered in determining the value of the performance rights granted
during the last two years.
Performance rights
Closing share price on grant date
Contractual life (in years)
Dividend yield (per annum)
Expected volatility of share price
Risk-free interest rate (per annum)
Performance rights hurdle discount
Fair value of performance rights (weighted average)
Expected time to vesting (in years)
Performance rights movements
Number of performance rights
Balance at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Balance at the end of the year
2023
$1.05
3.8–5.8
4%–5%
0%–40%
0%–2.9%
12%–58%
$0.75
3.7
2022
$1.01
4.1
0%–5%
39%
0.1%
42%
$0.59
3.1
2023
2022
32,410,318
29,754,528
5,345,802
7,592,943
–
–
(24,821,377)
(4,937,153)
12,934,743
32,410,318
129
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130
Notes to the financial statements
for the year ended 31 December 2023
4.2
Share-based payments continued
4.2
Share-based payments continued
(b) Share rights
The Chief Executive Officer (CEO), Executive Committee members, and certain executives and employees are provided share
rights as a part of their remuneration arrangements. These arrangements are summarised as follows:
(b) Share rights continued
Valuation of share rights
Long-term Variable
Remuneration Awards
Short-term
Incentive Awards
Salary
Sacrifice Plan
CEO Sign-on
Share Rights Award
Share rights
Overview
Share rights give the participant the right to acquire one fully paid ordinary share
in AMP Limited after a specified service period. They are granted at no cost
to the participant and carry no dividend or voting rights until they vest. All awards
are subject to ongoing employment, compliance with AMP policies and the
board’s discretion.
In 2021, AMP offered the opportunity to salary sacrifice between $1,000–$5,000
over a 12-month period to acquire shares in AMP which includes a matching
contribution on a 2:5 basis.
Vesting
conditions/
period
Long-term Variable Remuneration
(LTVR) awards for certain
executives (pre 2023) are subject
to continued service periods
of three or four years.
LTVR awards for certain executives
granted from 2023 onwards, are
subject to continued service periods
that vest in three equal tranches
over a three year period, or a single
tranche after four years.
Awards granted under the Deferred
Bonus Equity Plan are split into
two tranches with continued
service conditions of two and three
years respectively.
These awards may be settled
through an equivalent cash
payment, at the discretion
of the board.
Shares granted
under the
share matching
component of the
salary sacrifice
plan are subject
to continued service
for two years from
grant date.
The Short-term
Incentive (STI)
awards typically
have 40% to 60% of
the award deferred
in equity. The vesting
period is between
one to four years
of continued service.
These awards may
be settled through
an equivalent
cash payment,
at the discretion
of the board.
The sign-on share
rights give the
CEO the right to
acquire one fully
paid ordinary share
in AMP Limited
(per right) after
a specified service
period. They were
granted at no cost
to the CEO and
carry no dividend
or voting rights
until they vest. This
award may be
settled through an
equivalent cash
payment at the
discretion of the
board.
The first and
second tranches,
representing 96%
of the award, were
vested and released
to the CEO. The
remaining 4% of
the award are
scheduled to vest on
22 November 2024.
Unvested
awards
Unvested awards are forfeited if the participant voluntarily ceases employment or is dismissed
for misconduct.
The fair value of share rights has been calculated as at the grant date by external consultants using a discounted cash flow
methodology. If relevant to the award, fair value has been discounted for the present value of dividends expected to be paid
during the vesting period to which the participant is not entitled. For the purposes of the valuation, it is assumed share rights
are exercised as soon as they have vested. Assumptions regarding the dividend yield have been estimated based on AMP’s
dividend yield over an appropriate period.
In determining the share-based payments expense, the number of instruments expected to vest has been adjusted to reflect
the number of employees expected to remain with AMP until the end of the vesting period. The following table shows the
factors and range considered in determining the independent fair value of the share rights granted during the last two years:
Share rights
Closing share price on grant date
Contractual life (in years)
Dividend yield (per annum)
Dividend discount
Fair value of share rights (weighted average)
Expected time to vesting (in years)
Share rights movements
Number of share rights
Balance at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Balance at the end of the year
2023
$1.05
0.8–3.8
4%–5%
3%–16%
$0.94
0.0–3.1
2022
$0.96
0.9–3.9
0%–5%
0%–13%
$0.88
0.0–3.1
2023
2022
17,726,479
15,003,196
6,988,269
7,243,680
(3,570,506)
(3,296,779)
(1,099,223)
(1,223,618)
20,045,019
17,726,479
131
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132
Notes to the financial statements
for the year ended 31 December 2023
5
Section
Group entities
This section explains significant aspects of the AMP group structure, including significant investments
in controlled operating entities, and investments in associates. It also provides information on business
acquisitions and disposals made during the year.
5.1 Controlled entities
5.2 Discontinued operations
5.3
Investments in associates
5.4 Parent entity information
5.5 Related party disclosures
5.1
Controlled entities
Significant investments in controlled operating entities are as follows:
Operating entities
Name of entity
AMP Bank Limited
AMP Capital Funds Management Limited
Country of
registration
Australia
Australia
AMP Capital Investors (New Zealand) Limited
New Zealand
AMP Capital Investors Limited
AMP Capital Office and Industrial Pty Limited
AMP Capital Shopping Centres Pty Limited
AMP Financial Planning Pty Limited
Charter Financial Planning Limited
AMP Group Finance Services Limited
AMP Services (NZ) Limited
AMP Services Limited
AWM Services Pty Ltd
ipac Asset Management Limited
Hillross Financial Services Limited
AMP Wealth Management New Zealand Limited
AdviceFirst Limited
National Mutual Funds Management Ltd
N.M. Superannuation Pty Ltd
NMMT Limited
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Share type
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
Ord
% holdings
2023
100
–
–
–
–
–
100
100
100
100
100
100
100
100
100
100
100
100
100
2022
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
5.2
Discontinued operations
(a) Sale of AMP Capital
During 2022, AMP announced a series of sales transactions which resulted in AMP’s divestment of its AMP Capital and SMSF
businesses. AASB 5 Non-current Assets Held for Sale and Discontinued Operations (AASB 5) requires the income, expenses and
cash flows of these businesses to be separately disclosed as discontinued operations. For the year ended 31 December 2023,
discontinued operations represents the income, expenses and cash flows of:
— AMP Capital’s international infrastructure equity business from 1 January to 3 February 2023;
— AMP Capital’s real estate and domestic infrastructure equity business from 1 January to 24 March 2023; and
— SuperConcepts Self-Managed Superannuation Fund administration and software business from 1 January to 30 June 2023.
In accordance with AASB 5, the comparative period results have been restated. As result, in addition to the businesses above,
whose results were included for the entire comparative period, the discontinued operations for year ended 31 December 2022
also included the income, expenses and cashflows of:
— AMP Capital’s infrastructure debt platform from 1 January 2022 to 11 February 2022; and
— AMP Capital’s GEFI business from 1 January 2022 to 28 March 2022.
The residual assets of AMP Capital, principally its investments in CLAMP, PCCP and related sponsor investments remain
a part of the AMP group. Accordingly, the related income, expenses and cash flows of these investments are included within
continuing operations.
(b) Profit for the year from discontinued operations
The results of AMP Capital and SMSF sold businesses included within AMP group’s Consolidated income statement are set out
below, including comparative information.
Following the sale of AMP Capital, certain service arrangements will continue between AMP and those businesses. Where
relevant, revenue and expenses attributable to continuing operations from such arrangements have been presented within
continuing operations to reflect the ongoing nature of such arrangements. The result of the discontinued operations presented
below have been adjusted for these arrangements.
Total revenue of discontinued operations
Total expense of discontinued operations
Loss before tax from discontinued operations
Income tax expense
Loss for the year from discontinued operations before disposals
Gain on disposal of businesses sold
Income tax benefit/(expense) resulting from the gain on disposal of businesses sold 2
Gain on disposal of businesses sold after tax
Profit for the year from discontinued operations
Other comprehensive loss for the year from discontinued operations
Total comprehensive income for the year
1
2
Results for the year ended 31 December 2022 have been restated to be on a continuing operations basis.
Income tax expense is net of the utilisation of previously unrecognised capital losses.
2023
$m
146
(147)
(1)
–
(1)
232
15
247
246
(7)
239
2022 1
$m
452
(460)
(8)
(9)
(17)
413
(10)
403
386
(12)
374
(c) Cash flows provided by discontinued operations
The cash flows provided by discontinued operations during the year and included within the Consolidated statement of cash
flows, are set out below, including comparative information.
Net cash used in operating activities
Net cash provided by investing activities
Net cash provided by discontinued operations
2023
$m
(107)
360
253
2022
$m
(89)
488
399
133
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134
Notes to the financial statements
for the year ended 31 December 2023
5.2
Discontinued operations continued
5.3
Investments in associates continued
Critical accounting estimates and judgements:
The presentation of discontinued operations includes gains or losses recognised on the sale of AMP Capital and
SMSF businesses and incorporates management’s judgements in relation to:
— determining whether the relevant group of assets meet the held for sale classification, including judgements
applied in estimating the likely satisfaction of key condition precedents and estimating the timeframe that
transactions will complete within from the balance date,
— determining the fair value of the assets and liabilities held for sale, including related impairment
considerations, and
— assumptions used to estimate purchase price adjustments, earn-outs, the allocation of goodwill, provisions
for directly attributable separation costs yet to be incurred, warranties and indemnities under sale
agreements and potential onerous contracts resulting from the separation.
5.3
Investments in associates
Investments in associates accounted for using the equity method:
Accounting Policy – recognition and measurement
Investments in associates
Investments in entities over which the AMP group has the ability to exercise significant influence, but not control, are accounted
for using the equity method. The investment is measured at cost plus post-acquisition changes in the AMP group’s share of the
associates’ net assets, less any impairment in value. The AMP group’s share of profit or loss of associates is included in the
Consolidated income statement. Any dividend or distribution received from associates is accounted for as a reduction in the
carrying value of the associate.
Any impairment is recognised in the Consolidated income statement when there is objective evidence that a loss has been
incurred. It is measured as the amount by which the carrying amount of the investment in entities exceeds the recoverable amount.
5.4
Parent entity information
(a) Statement of comprehensive income – AMP Limited entity
Dividends and distributions from controlled entities and net gains or losses on financial assets 1
Interest revenue
Service fee revenue
2023
$m
704
1
6
38
–
(80)
–
(27)
134
776
776
2022
$m
27
1
5
47
87
(9)
(100)
(36)
76
98
98
Ownership interest
Carrying amount 1
Share of profit from associates accounted for using the equity method
Associate
Principal activity
Place of business
2023
%
2022
%
China Life Pension Company 2 3
Pension Company
China
19.99
19.99
2023
$m
461
2022
$m
447
China Life AMP Asset Management
Company Ltd 3
PCCP, LLC (Pacific Coast Capital
Partners)
Other 4
Total investments in associates
Investment Management China
14.97
14.97
88
81
Investment Management United States
23.27
23.87
n/a
n/a
180
74
803
170
73
771
1 The carrying amount is after recognising $75m (2022: $80m) share of current year profit or loss from the associates accounted for using the
equity method.
2 AMP’s 31 December 2022 financial report was qualified with respect to the external auditor’s ability to obtain sufficient, appropriate, third-party
audit evidence about AMP’s share of the net income and consequently the carrying amount of its investment in China Life Pension Company
(CLPC) for the year ended 31 December 2022. On 28 March 2023, subsequent to the issuance of AMP’s 31 December 2022 financial report,
CLPC’s audited financial statements were issued which evidenced that AMP’s share of CLPC’s net income for the year ended 31 December 2022
and consequently the carrying amount of AMP’s investment in CLPC at that date was supported.
3 AMP has significant influence through representation on the entity's board.
4 Other primarily consists of ownership interests in Advice-related businesses.
Other income
Operating expenses
Impairment of investments in controlled entities
Finance costs
Income tax benefit 2
Profit for the year
Total comprehensive income for the year
1 Dividends and distributions from controlled entities of $694m (2022: $13m) is not assessable for tax purposes.
2 Income tax benefit includes $nil (2022: $nil) utilisation of previously unrecognised revenue tax losses.
135
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136
Notes to the financial statements
for the year ended 31 December 2023
5.4
Parent entity information continued
5.5
Related party disclosures
(b) Statement of financial position – AMP Limited entity
Current assets
Cash and cash equivalents
Receivables and prepayments 1
Current tax assets
Loans and advances to subsidiaries
Investments in other financial assets
Non-current assets
Investments in controlled entities
Investments in associates
Loans and advances to subsidiaries
Deferred tax assets 2
Total assets
Current liabilities
Payables 1
Interest-bearing liabilities
Current tax liabilities
Provisions
Other financial liabilities
Subordinated debt
Non-current liabilities
AMP Capital Notes 2 3
AUD Medium Term Notes 3
Total liabilities
Net assets
Equity
Contributed equity
Share-based payment reserve
Other reserve
Retained earnings
Total equity
2023
$m
7
211
78
250
11
2022
$m
1
172
69
350
65
4,302
4,909
471
500
353
457
500
289
(a) Key management personnel
Compensation of key management personnel
Short-term benefits
Post-employment benefits
Share-based payments
Other long-term benefits
Termination benefits
Total
2023
$'000
7,857
302
3,046
(36)
433
2022
$'000
10,069
378
3,577
55
291
11,602
14,370
Compensation of the group’s key management personnel includes salaries, non-cash benefits and contributions to the
post-employment benefits. Executive officers also participate in share-based incentive programs (refer to note 4.2).
The amounts disclosed in the table are recognised as an expense during the reporting period.
6,183
6,812
Loans to key management personnel
Loans to key management personnel and their related parties are provided by AMP Bank and are on similar terms and conditions
generally available to other employees within the group. No guarantees are given or received in relation to these loans. Loans
have been made to five current and former key management personnel and their related parties. Details of these loans are:
Balance at the beginning of the year
Net advances
Balance at the end of the year
Interest charged
2023
$'000
4,165
774
4,939
199
2022
$'000
3,605
560
4,165
114
Key management personnel access to AMP’s products
From time to time, key management personnel or their related entities may have had access to certain AMP products and
services such as investment products, personal banking and financial investment services. These products and services are
offered to key management personnel on the same terms and conditions as those entered into by other group employees
or customers.
496
–
23
112
–
–
274
273
1,178
5,005
874
632
58
2
3
252
272
–
2,093
4,719
4,670
5,008
31
25
279
5,005
29
12
(330)
4,719
1 Receivables and payables include tax-related amounts receivable from subsidiaries $118m (2022: $168m) and payable to subsidiaries $437m
(2022: $434m).
2 Deferred tax assets include amounts recognised for losses available for offset against future taxable income of $352m (2022: $287m).
3 The AMP Limited entity is the issuer of AMP Capital Notes 2 and AUD Medium Term Notes. Further information on these is provided in note 3.2.
(c) Contingent liabilities of the AMP Limited entity
The AMP Limited entity has entered into deeds to provide capital maintenance and liquidity support to AMP Bank Limited.
At the reporting date, the likelihood of any outflow in settlement of these obligations is considered remote.
137
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138
Notes to the financial statements
for the year ended 31 December 2023
5.5
Related party disclosures continued
(b) Transactions with related parties
Transactions with non-executive directors
Some non-executive directors of AMP group hold directorships or positions in other companies or organisations. AMP may
provide or receive services from these companies or organisations negotiated based on arm’s length terms. None of the
non-executive directors were, or are, involved in any procurement or board decision making regarding the companies
or organisations with which they have an association.
Transactions with other associates
The group provides investment management and banking services under general service level agreements with other
associates as well as support to financial advice practices.
Dividends were received from associates.
Transactions with investment entities
The AMP group, from time to time, invests sponsor capital. The structure of the fund or the group’s level of ownership may result
in the fund being treated as an associate of the group. See note 5.3 for details of the group’s associates. Management fees are
earned by AMP or its associates for managing and administering these investment funds.
All transactions between the group, its associates and the funds are on an arm’s length basis.
Accounting policy – recognition and measurement
Short-term benefits – Liabilities arising in respect of salaries and wages and any other employee entitlements expected
to be settled within 12 months of the reporting date are measured at their nominal amounts.
Post-employment benefits – Defined contribution funds – The contributions paid and payable by the AMP group to defined
contributions funds are recognised in the Consolidated income statement as an operating expense when they fall due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Share-based payments – Refer to note 4.2.
Other long-term benefits – Other employee entitlements are measured at the present value of the estimated future cash
outflows to be made in respect of services provided by employees up to the reporting date. In determining the present value
of future cash outflows, discount rates are determined with reference to market yields at the end of the reporting period
on high quality corporate bonds or, in countries where there is no deep market in such bonds, by using market yields at the
end of the period on government bonds.
6
Section
Other Disclosures
This section includes disclosures other than those covered in the previous sections required
for the AMP group to comply with the accounting standards and pronouncements.
6.1 Notes to the Consolidated statement of cash flows
6.2 Commitments
6.3 Right of use assets and lease liabilities
6.4 Provisions and contingent liabilities
6.5 Auditor’s remuneration
6.6 New accounting standards
6.7 Events occurring after reporting date
6.1
Notes to the Consolidated statement of cash flows
(a) Reconciliation of cash flow from operating activities
Net profit after income tax
Depreciation of operating assets
Amortisation and impairment of intangibles
Investment gains/(losses) and share of profit/(losses) from investments in associates
Dividend and distribution income received
Share-based payment expense
Increase in loans and advances, receivables and other assets
Decrease in guarantee liabilities
(Decrease)/increase in income tax balances
Increase in deposits, other payables and provisions
Net cash (used in)/provided by operating activities
Accounting policy – recognition and measurement
Cash and cash equivalents
2023
$m
265
39
33
(193)
31
9
(507)
(32)
(41)
291
(105)
2022
$m
387
57
52
(474)
71
11
(1,545)
(21)
88
2,337
963
Cash and cash equivalents comprise cash-on-hand that is available on demand and deposits that are held at call with
financial institutions. Cash and cash equivalents are measured at fair value, being the principal amount. For the purpose
of the Consolidated statement of cash flows, cash and cash equivalents also include other highly liquid investments not subject
to significant risk of change in value, with short periods to maturity, net of outstanding bank overdrafts. Bank overdrafts are
shown within interest-bearing liabilities in the Consolidated statement of financial position.
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Notes to the financial statements
for the year ended 31 December 2023
6.2
Commitments
(a) Investment commitments
At 31 December 2023, AMP group had uncalled investment commitments of $18m (2022: $81m) in relation to certain sponsor
investments. Subsequent to the reporting date, $nil of this committed capital was invested by AMP group into managed
funds. These investment commitments will only be called when suitable investment opportunities arise, and the exact timeline
remains unspecified.
(b) AMP Bank credit-related commitments
At 31 December 2023, AMP Bank had credit-related commitments of $3,576m (2022: $3,464m), which included undrawn balances
on customer approved limits as well as loan offers pending signing by customers and signed loan contracts pending settlement.
AMP Bank expects that not all of the credit-related commitments will be drawn before their contractual expiry.
6.3
Right of use assets and lease liabilities
Per AASB 16 Leases (AASB 16), the group recognises lease liabilities except for short-term leases and leases where the underlying
asset is of low value, with corresponding right of use assets in the Consolidated statement of financial position.
(a) Right of use (ROU) assets
The main type of ROU asset recognised by the group is premises. The following table details the carrying amount of the ROU
assets at 31 December 2023 and the movements during the year.
Balance at the beginning of the year
Additions
Derecognitions and transfers to sublease receivables 1
Impairment expense 2
Depreciation expense
Foreign currency exchange rate movement
Transferred to assets held for sale
Balance at the end of the year
2023
$m
396
10
(11)
(27)
(39)
–
–
329
2022
$m
96
469
(90)
(30)
(47)
1
(3)
396
Includes transfers to sublease receivables of $11m (2022: $60m).
1
2 Includes an impairment expense of $11m (2022: $1m) recognised in relation to discontinued operations.
(b) Lease liabilities
The following table details the carrying amount of lease liabilities at 31 December 2023 and the movements during the year.
6.3
Right of use assets and lease liabilities continued
Accounting policy – recognition and measurement
At inception, the AMP group assesses whether a contract is, or contains, a lease. Such assessment involves the application
of judgement as to whether:
— the contract involves the use of an identified asset;
— the group obtains substantially all the economic benefits from the asset; and
— the group has the right to direct the use of the asset.
It is AMP’s policy to separate non-lease components when recognising the lease liability.
The group recognises a Right of Use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially
measured as the present value of future lease payments, plus initial direct costs and restoration costs of the underlying asset,
less any lease incentives received. The ROU asset is depreciated over the shorter of the lease term and the useful life of the
underlying asset. The ROU asset is tested for impairment, including any reversal, if there is an indicator, and is adjusted for
certain remeasurements of the lease liability.
A lease liability is initially measured at the present value of future lease payments discounted using the group’s incremental
borrowing rate. Lease payments generally include fixed payments and variable payments that depend on an index, eg CPI.
A lease liability is remeasured when there is a change in future lease payments from a change in an index, or if the group’s
assessment of whether an option will be exercised changes.
Interest expense on lease liabilities is recognised within finance costs in the Consolidated income statement.
The group has elected not to recognise ROU assets and lease liabilities for leases where the lease term is less than or equal
to 12 months and where the underlying asset is of low value. Payments for such leases are recognised as an expense
on a straight-line basis over the lease term.
Critical accounting estimates and judgements
Management applies judgement in identifying and measuring lease liabilities and assessing impairment
indicators for ROU assets which includes:
— assessing whether a contract contains a lease;
— determining lease term and incremental borrowing rate;
— separating lease and non-lease components;
— assessing lease modification vis-a-vis new lease;
— assessing the usage of ROU assets and the associated benefits.
Balance at the beginning of the year
Additions
Derecognitions
Interest expense
Payments made
Transferred to liabilities held for sale
Balance at the end of the year
2023
$m
569
2
–
31
(66)
–
536
2022
$m
135
517
(40)
25
(65)
(3)
569
6.4
Provisions and contingent liabilities
(a) Provisions
Compliance, remediation and litigation
Obligations relating to corporate reorganisation
Other 1
Total provisions
2023
$m
261
78
169
508
2022
$m
81
91
125
297
The AMP group paid $3m (2022: $8m) in relation to short-term leases and $nil (2022: $nil) in relation to variable lease
payments. The total cash outflow for leases in 2023 was $69m (2022: $73m).
1 Other provisions include provisions for onerous lease arrangements, deferred payments relating to purchase of client registers, make-good
provisions relating to premises and other operational provisions.
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Notes to the financial statements
for the year ended 31 December 2023
6.4
Provisions and contingent liabilities continued
6.4
Provisions and contingent liabilities continued
(b) Movements in provisions
Balance at the beginning of the year
Net provisions raised during the year
Provisions utilised during the year
Balance at the end of the year
Compliance,
remediation
and litigation 1
$m
Obligations
relating
to corporate
reorganisation
$m
81
250
(70)
261
91
76
(89)
78
Other
$m
125
89
(45)
169
Total
$m
297
415
(204)
508
1 Net provisions raised during the year include provisions of $110m and $100m in respect of shareholder and financial adviser class actions
respectively. The nature of these class actions have been described in AMP’s half year financial report for the period ended 30 June 2023.
During the second half of 2023 and up to the date of this report, the following developments have occurred: agreements to settle the
shareholder and financial adviser class actions were reached subject to approval by the Supreme Court of New South Wales and the Federal
Court of Australia respectively. Court approval of the settlement of the shareholder class action was received on 14 November 2023 and
the payment was finalised in January 2024 (refer to note 6.7 for further information). Court approval of the financial adviser class action is
expected in the first half of 2024 upon which the payment will be finalised.
Accounting policy – recognition and measurement
Provisions
Provisions are recognised when:
— AMP has a present obligation (legal or constructive) as a result of a past event;
— it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
— a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the reporting date. For provisions other than employee entitlements, the discount rate used to determine the
present value reflects current market assessments of the time value of money and the risks specific to the liability.
A contingent liability is disclosed where a legal or constructive obligation is possible, but not probable; or where the obligation
is probable, but the financial impact of the event is unable to be reliably estimated.
From time to time the AMP group may incur obligations or suffer financial loss arising from litigation or contracts entered into in the
normal course of business, including guarantees issued for performance obligations of controlled entities in the AMP group.
Legal proceedings threatened against AMP may also, if filed, result in AMP incurring obligations or suffering financial loss.
Where it is determined that the disclosure of information in relation to a contingent liability can be expected to adversely
prejudice the position of the AMP group (or its insurers) in a dispute, accounting standards allow AMP to not disclose such
information. It is AMP’s policy that such information is not disclosed in this note.
Industry and regulatory compliance investigations
AMP is subject to review from time to time by regulators, both in Australia and offshore. In Australia, AMP’s principal regulators are
APRA, ASIC, AUSTRAC and the ATO, although other government agencies may have jurisdiction depending on the circumstances.
The reviews and investigations conducted by regulators may be industry-wide or specific to AMP and the outcomes of those reviews
and investigations can vary and may lead, for example, to the imposition of penalties, disagreement with management’s position
on judgemental matters including provisions and tax positions, variations or restrictions to licences, the compensation of clients,
enforceable undertakings or recommendations and directions for AMP to enhance its control framework, governance and systems.
AMP regularly undertakes internal reviews, as part of ongoing monitoring and supervision activities, to determine, amongst
other things, where clients or other stakeholders, including employees, may have been disadvantaged. In some instances,
compensation has been paid and where the results of our reviews have reached the point that compensation is likely and can
be reliably estimated then a provision has been raised. These provisions are judgemental and the actual compensation could
vary from the amounts provided.
Addressing historical matters through regulator actions
AMP has been working through a number of historical matters raised at the Royal Commission and elsewhere, and since 2018,
has been taking action to strengthen assurance and operational controls, accountability and processes, improve compliance
and risk management, and remediate impacted customers. In 2021, AMP’s Superannuation Trustees (AMP Superannuation Pty
Limited and N.M. Superannuation Proprietary Limited) entered into an enforceable undertaking (EU) with APRA for historical
matters in the Superannuation business. APRA has acknowledged that AMP has addressed and completed remediation
of several matters, and at the completion of this EU, AMP envisages that all outstanding matters referred to APRA by the
Financial Services Royal Commission will be concluded.
Litigation and claims
Superannuation class actions
During May and June 2019, certain subsidiaries of AMP Limited, namely, N.M. Superannuation Proprietary Limited (NM Super),
AMP Superannuation Pty Limited (AMP Super), NMMT Limited and AMP Services Limited (AMP Services), were served with two
class actions in the Federal Court of Australia (the Federal Court). The first of those class actions related to the fees charged
to members of certain of AMP superannuation funds. The second of those actions related to the fees charged to members,
and interest rates received and fees charged on cash-only fund options. The two proceedings were brought on behalf
of certain superannuation clients and their beneficiaries. Subsequently, the Federal Court ordered that the two proceedings
be consolidated into one class action. The consolidated class action is in respect of the period July 2008 to September 2019.
The AMP respondents have filed defences to the proceedings. The claims are yet to be quantified and participation has not
been determined. At present, the proceedings are listed for a trial of eight weeks commencing on 26 May 2025. Currently,
the potential outcome and costs associated with the matter remain uncertain. The proceedings are being defended.
Commissions for advice and insurance advice class action
In July 2020, AMPFP and Hillross Financial Services Limited (Hillross), both subsidiaries of AMP Limited, were served with a class
action in the Federal Court. The class action related to advice provided by some aligned financial advisers in respect of certain
life and other insurance products. Subsequently, in August 2020, AMP Limited, AMPFP, Hillross and Charter Financial Planning
Limited (Charter), were served with a class action in the Federal Court. The class action primarily related to the payment
of commissions to some aligned financial advisers in respect of certain life insurance and other products and in respect
of allegations of charging of fees where advice services were not provided. In December 2020, the Federal Court ordered that
these two class actions be consolidated. The consolidated class action is in respect of the period July 2014 to February 2021.
The AMP respondents have filed a defence to the proceedings. The claim is yet to be quantified and participation has not been
determined. Currently, the potential outcome and costs associated with the matter remain uncertain. The proceedings are
being defended.
Proceedings brought by Munich Re Australia
In April 2023, AMP Limited and certain subsidiaries, namely, AMP Services, NM Super, AMP Super and AWM Services Pty
Limited, were served with proceedings in the Supreme Court of New South Wales brought by Munich Reinsurance Company
of Australasia Limited (Munich Re). The proceedings primarily relate to allegations of misleading or deceptive conduct
in respect of the entry by Munich Re and Resolution Life Australasia Limited (formerly AMP Life Limited, which is also
a defendant to the proceedings) (RLA) into certain reinsurance arrangements in 2016 and 2017. The AMP respondents have
filed a defence in the primary proceedings. RLA has similarly filed a defence in the primary proceedings and a cross-claim
against AMP Services in respect of an indemnity said to be given by AMP Services to RLA. AMP Services is yet to file a defence
to the cross-claim. The claim is yet to be quantified. Currently, the potential outcome and costs associated with the matter
remain uncertain. The proceedings are being defended.
Indemnities and warranties
Under the terms of sale agreements of various entities transacted by AMP from time to time, AMP has given certain covenants,
warranties and indemnities in favour of counterparties to those sales. From time to time, AMP may be notified of potential
breaches of these covenants, warranties and indemnities. A breach of these covenants or warranties, or the triggering
of an indemnity, may result in AMP being potentially liable for some future payments to those entities. Management reviews
these notified potential breaches on an ongoing basis, and provision amounts, where applicable, are adjusted at each reporting
period to reflect management’s best estimate. In addition, there remain other indemnities and warranties for which no provision
has been recognised as at the reporting date and a contingent liability exists should such indemnities and warranties be called
upon or where actual outcomes differ from management’s expectations.
Critical accounting estimates and judgements
The group recognises a provision where a legal or constructive obligation exists at the balance sheet date and
a reliable estimate can be made of the likely outcome. Provisions are reviewed on a regular basis and adjusted
for management’s best estimates, however significant judgement is required to estimate likely outcomes and
future cash flows. The judgemental nature of these items means that future amounts settled may be different
from those provided for.
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Notes to the financial statements
for the year ended 31 December 2023
6.5
Auditor’s remuneration
6.6
New accounting standards
Audit services
— Group
— Controlled entities
Total audit services remuneration
Audit related assurance services
Statutory assurance services 1
Other assurance services – audit related 2
Total audit related assurance services remuneration
2023
$'000
2,239
1,878
4,117
244
1,005
1,249
2022
$'000
2,426
2,455
4,881
607
1,384
1,991
Total audit related services remuneration
5,366
6,872
Non-audit services
— Other assurance services – non-audit related 3
— Taxation compliance services
— Other services 4
Total non-audit services remuneration
Total auditor’s remuneration 5
–
5
375
380
1,234
367
746
2,347
5,746
9,219
1 Statutory assurance services relate to AFSL audits and certain APRA reporting assurance required to be performed by the statutory auditor.
2 Other assurance services – audit related primarily relate to compliance plan audits, sustainability audit, other APRA compliance reporting,
derivative risk statement assurance, and internal control reviews.
3 FY22 fees relate to the services associated with the demerger and sale of the AMP Capital businesses.
4 Other services include risk management reviews, regulatory reviews, and transaction services.
5 Total amount excludes audit related fees and non-audit fees paid or payable for Trusts and Funds not consolidated into the group. Total fees
excluded are $3,392k (2022: $6,320k) of which $140k (2022: $226k) related to non-audit services.
(a) New and amended accounting standards adopted by the AMP group
A number of new accounting standards’ amendments have been adopted effective 1 January 2023. These have not had
a material effect on the financial position or performance of the AMP group.
(b) New accounting standards issued but not yet effective
A number of new accounting standards and amendments have been issued but are not yet effective, none of which have been
early adopted by the AMP group in this financial report. These new standards and amendments, when applied in future periods,
are not expected to have a material impact on the financial position or performance of the AMP group.
6.7
Events occurring after reporting date
In January 2024, AMP finalised its payment obligation in the shareholder class action brought by Komlotex Pty Ltd in June 2018,
for a total sum of $110m inclusive of interest and costs. An amount of $74m was covered by insurance proceeds, resulting
in a net $36m expense for AMP in the FY23 financial report.
As at the date of this report, the directors are not aware of any other matters or circumstances other than those described
in the report that have arisen since the end of the financial year that have significantly affected, or may significantly affect:
— the AMP group’s operation in future years;
— the results of those operations in future years; or
— the AMP group’s state of affairs in future financial years.
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Directors’ declaration
for the year ended 31 December 2023
In accordance with a resolution of the directors of AMP Limited, for the purposes of section 295(4) of the Corporations Act
2001, the directors declare that:
(a) in the opinion of the directors, there are reasonable grounds to believe that AMP Limited will be able to pay its debts
as and when they become due and payable;
(b) in the opinion of the directors, the financial statements and the notes of the AMP Limited consolidated entity for the
financial year ended 31 December 2023 are in accordance with the Corporations Act 2001, including section 296
(compliance with accounting standards) and section 297 (true and fair view);
(c) the notes to the financial statements of the AMP Limited consolidated entity for the financial year ended 31 December 2023
include an explicit and unreserved statement of compliance with the International Financial Reporting Standards, as set out
in ‘About this report – (a) Understanding the AMP financial report’ section of the Notes to the financial statements; and
(d) the declarations required by section 295A of the Corporations Act 2001 have been given to the directors.
Independent Auditor’s Report
to the Shareholders of AMP Limited
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Debra Hazelton
Chair
Alexis George
Chief Executive Officer and Managing Director
Sydney, 14 February 2024
Report on the Financial Report for the Year Ended 31 December 2023
Qualified opinion
We have audited the financial report of AMP Limited (the Company) and its subsidiaries (collectively the Group or AMP),
which comprises the consolidated statement of financial position as at 31 December 2023, the consolidated income
statement, the consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements, including material
accounting policy information, and the directors’ declaration.
In our opinion, except for the possible effects of the matter described in the Basis for qualified opinion section of our
report, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a. giving a true and fair view of the consolidated financial position of the Group as at 31 December 2023 and of its
consolidated financial performance for the year ended on that date; and
b. complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for qualified opinion
As disclosed in section 5.3 of the notes to the financial statements, the Company’s investment in China Life Pension
Company (CLPC), a foreign associate accounted for using the equity method, is carried at $461 million on the consolidated
statement of financial position at 31 December 2023. The Company’s share of CLPC’s post-tax net income of $38 million
is included in the Company’s income for the year then ended. The financial statements of CLPC are still in the process
of being audited by CLPC’s auditor at the date of this report, and consequently we were unable to obtain sufficient
appropriate evidence about the Company’s share of CLPC’s net income for the year then ended and consequently the
carrying amount of the Company’s investment in CLPC as at 31 December 2023 to the extent it was impacted by this
amount. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
Our opinion on the financial report for the year ended 31 December 2022 was similarly qualified. In the audit for the
year ending 31 December 2023, we were able to obtain sufficient appropriate evidence to support the Company’s share
of CLPC’s net income that was recorded in 2022 and consequently the carrying amount of the Company’s investment
in CLPC as at 31 December 2022 to the extent it was impacted by this amount.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report
in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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Independent Auditor’s Report
to the Shareholders of AMP Limited
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial report of the current year. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. In addition
to the matter described in the Basis for qualified opinion, we have determined the matters described below to be the key
audit matters to be communicated in our report. For each matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section
of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our
audit procedures, including the procedures performed to address the matters below, provide the basis for our audit
opinion on the accompanying financial report.
Credit Provisions
Financial report reference: Section 2.1: Loans and advances, Section 3.3 Financial Risk Management
Why significant
How our audit addressed the matter
As at 31 December 2023 loans and advances totalled
$24,630 million against which provisions for expected
credit losses of $100 million are required to be recorded
in accordance with Australian Accounting standards,
as disclosed in section 2.1.
This was a key audit matter due to the value of the
provisions, and the degree of judgment and estimation
uncertainty associated with the provision calculation.
Key areas of judgment included:
— the application of the impairment requirements
of AASB 9 Financial Instruments within the Group’s
expected credit loss methodology;
— the identification of exposures with a significant
Our audit procedures included the following:
— We assessed the methodology of the Group’s
expected credit loss model and its underlying
methodology against the requirements of AASB 9.
— We assessed the following for exposures evaluated
on a collective basis and associated overlays:
•
•
significant modelling and forward-looking
macroeconomic assumptions;
the basis for and data used to determine the
provision at 31 December 2023; and
• we involved our actuarial specialists to test
the mathematical accuracy of the model and
to assess key assumptions.
deterioration in credit risk;
— We examined a sample of exposures on an individual
— assumptions used in the expected credit loss
model (for exposures assessed on an individual
or collective basis); and
— the incorporation of forward-looking information
to reflect current and anticipated future external
factors, including economic scenarios adopted
and the probability weighting determined for
each scenario.
basis by:
• assessing the reasonableness and timeliness
of internal credit quality assessments based
on the borrowers’ particular circumstances; and
•
evaluating the associated provisions by
assessing the reasonableness of key inputs
into the calculation, with particular focus on
collateral values, work out strategies and the
value and timing of recoveries.
— We also assessed the adequacy of the disclosures
in the notes to the financial statements.
Independent Auditor’s Report
to the Shareholders of AMP Limited
Taxation
Financial report reference: Section 1.4: Taxes
Why significant
How our audit addressed the matter
As presented in the consolidated statement of financial
position and Section 1.4, the Group has significant tax
balances as at 31 December 2023, being a current tax
asset of $83 million, a current tax liability of $23 million,
a deferred tax asset of $640 million, and a deferred tax
liability of $16 million.
Due to the complexity and high level of judgment
required in the following areas, we considered this
to be a key audit matter:
— the tax consequences of recent changes to the
entities within the AMP Limited tax consolidated
group;
— estimating future taxable income and assessing the
recoverability of tax losses and other deferred tax
assets in future years; and
— the adequacy of provisioning and assessing the
recoverability of current tax.
Our audit procedures included the following:
— We involved our tax specialists to assess the
application of tax laws and regulations in the
determination of the Group’s tax balances,
including the Group’s assessment of the impact
of entities leaving and joining the tax consolidated
group on the determination of tax balances.
— We examined the Group’s deferred tax asset
recoverability assessment and evaluated the
reasonableness of key assumptions, including:
• assessing the Group’s growth and other key
assumptions and reviewing tax adjustments
made to the Group’s profit forecasts to
determine future taxable income; and
•
reviewing and assessing the Group’s analysis
to determine the period over which deferred
tax assets attributable to tax losses are forecast
to be utilised.
— We evaluated management’s assessment of the
recoverability of current tax assets including
the underlying tax principles applied and
management forecasts.
— We also assessed the adequacy of the disclosures
in the notes to the financial statements.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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Independent Auditor’s Report
to the Shareholders of AMP Limited
Information Technology (IT) systems and controls over financial reporting
Why significant
How our audit addressed the matter
— A significant part of the Group’s operations and
— We focused our audit procedures on those IT
financial reporting processes are primarily reliant
on IT systems for the processing and recording
of a high volume of transactions.
— The group-wide IT environment is complex in
terms of the scale and nature of IT systems relied
upon. IT General Controls (ITGCs) support the
continuous operation of the automated and other
IT dependent controls within the business processes
related to financial reporting. Effective ITGCs are
required to ensure that IT applications process
business data as expected and that changes are
made in an appropriate manner.
— A fundamental component of these IT systems
and controls is ensuring that risks relating
to inappropriate user access management,
unauthorised program changes and IT operating
protocols are addressed.
— We identified User Access Management including
IT privileged access controls for applications that
are critical to financial reporting is of a heightened
risk and therefore this is considered to be a key
audit matter.
systems and controls that are significant to the
Group’s financial reporting process.
— We involved our IT specialists to assist with
assessing and evaluating the significant IT systems
and controls.
— We assessed the design and tested the operating
effectiveness of the Group’s IT controls, including
those related to user access management, change
and operating management and data integrity.
— Where we identified design and/or operating
deficiencies in the IT control environment, our audit
procedures included the following:
• assessed the integrity and reliability of the
systems and data related to financial reporting;
and
• where automated procedures were supported
by systems with identified deficiencies,
we assessed compensating or mitigating
controls that were not reliant on the IT
control environment. This involved varying
the nature, timing and extent of audit
procedures performed.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in the
Company’s 2023 Annual Report but does not include the financial report and our auditor’s report thereon.
Independent Auditor’s Report
to the Shareholders of AMP Limited
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
— Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
— Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether
the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
— Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
151
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Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and
is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most significance in the
audit of the financial report of the current year and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
152
Independent Auditor’s Report
to the Shareholders of AMP Limited
Securityholder information
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31 December 2023.
In our opinion, the Remuneration Report of AMP Limited for the year ended 31 December 2023, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Ernst & Young
Sarah Lowe
Partner
Sydney
14 February 2024
Distribution of AMP Capital Notes 2 holdings as at 1 February 2024
Range
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,000 over
TOTAL
Number of holders
Notes held % of issued capital
2,508
336
25
28
1
902,918
666,065
174,634
787,461
218,922
32.83
24.22
6.35
28.63
7.96
2,898
2,750,000
100.00
As at 1 February 2024, the total number of shareholders holding less than a marketable parcel of five AMP Capital Notes is four.
Twenty largest AMP Capital Notes 2 holders as at 1 February 2024
Rank
Name
Notes held % of issued Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
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