After the Australian wealth management warned of reduced growth prospects for the remainder of the year and a decline in yearly margins as high-interest rates impacted profitability, AMP (AMP.AX) fell to a more than two-month low on Wednesday.
The 173-year-old company predicted that for the year ending in December, the net interest margin will fall below the previous guideline target of 1.30% to 1.35%.
“We expect to see subdued growth for the remainder of the year.” According to Kyle Rodda, senior market analyst at Capital.com, “with higher rates expected to weigh on asset valuations and credit growth, it seems the cyclical headwinds are adding to the deeper strategic ones hurting AMP’s business.”
The platform net cashflows for AMP decreased from A$748 million to A$426 million ($271.06 million) during the third quarter.
According to CEO Alexis George, as AMP’s clients reacted to the present macroeconomic situation, net cashflows decreased due to a persistent decline in discretionary investments. Earlier in the day, AMP shares dropped to their lowest level since August 10 and as much as 4.4% to A$1.085.
“We continue to actively manage the Bank portfolio in what remains a highly competitive environment, particularly as the Term Funding Facility (TFF) refinancing continues across the market,” said George.
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