In the first part of a major restructure AMP has announced, amongst other things, that it is going to exit the mortgage business in New Zealand.
This decision is part of a plan to exit the manufacturing side of banking. Rather the company will offer targeted products manufactured by third parties.
The group is also getting out of the property finance business here.
AMP had considered an outright sale of its banking operations but has decided to restrict its operations to the profitable areas, leverage off its brand name and sell third party products.
This will involve selling its current mortgage book and credit card portfolio. AMP chief executive Andrew Mohl says the company is already discussing the latter with American Express.
New Zealand savings deposits will either be wound back or transferred to other banks.
Michael Guggenheimer, head of retail banking in Australia and New Zealand at AMP, says the New Zealand banking operation made a net loss of $1.5 million in the six months ended 30 June.
While that was a big improvement on the $8 million loss it made in the same period last year, "in New Zealand, the business isn‘t meeting the acceptable return on capital," he says.
It is possible a prospective buyer of the existing book may want it as a going concern, and so want some of the people, but it is also possible buyers may only be interested in the portfolio, he says.
AMP’s plans for its banking operations in Britain are the same as for New Zealand. In Australia, the bank will continue to provide retail deposits and mortgages, but will use securitisation to reduce capital requirements. It will exit the credit card and property finance business in Australia.
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