AMP Share Price Falls Again as Remediation Bill Grows

At time of writing, shares of AMP Limited [ASX:AMP] are down 3.9%, trading at $2.36 per share.

Compared to the Big Four, it has been a particularly rough year for AMP:

AMP Share Price

Source: marketindex.com.au

The latest bad news relates to the remediation bill for customers they provided bad advice to, or were charged for no service.

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Share price down after AMP CEO explains bigger remediation bill

In evidence given to the Banking Royal Commission yesterday, interim CEO Michael Wilkins explained that AMP expects to spend $1.18 billion to compensate customers.

He added that the $290 million it had initially set aside was not the real figure due to accounting rules.

Perhaps the most damaging thing about Wilkins testimony, is that he didn’t rule out the possibility of finding further cases of fees-for-no-service among the review of 217,000 customer files.

Previously, AMP shares received a much needed bounce on a proposed takeover by Macquarie Group Ltd [ASX: MQG].

Does it get any worse for AMP’s share price?

Each time Markets & Money has taken a look at AMP over the past few months, it has gone from bad to worse.

Part of the problem is that the company continues to adjust figures, whether it be in relation to compensation or cutting fees.

It has recently moved ahead with its plan to sell its life insurance arm — announcing the sale to British Resolution Life at almost a fifth below book value.

Investors could be hoping the Macquarie takeover eventuates because restructuring will take a significant amount of time to produce results.

AMP’s new CEO, Francesco De Ferrari, takes over from Wilkins on 1 December this year.

Regards,

Lachlann Tierney,
For Markets & Money

PS: AMP is eerily similar to these five ‘fatal’ stocks we detail in our free report. It’s available here.


Lachlann Tierney is a writer for Markets & Money. He has lived and studied in the US, the UK, and Australia. With an MSc from London School of Economics (LSE) he brings a strong grasp of geopolitics and world affairs to his analysis. Lachlann is always on the lookout for the news that will give you an edge in tomorrow’s markets.


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