AMP asset write-down
AMP shares have had a volatile time early this week after an announcement that the group is facing asset write-downs of around $1.2 billion for its UK and former international division. AMP's shares dropped 39 cents to $12.11 in early trading on Monday but then rose to close only two cents lower at $12.48 as investors shrugged off the news.
New CEO Andrew Mohl said the value of the assets wasn't likely to recover “for some time”. Analysts said they weren't surprised by the size of the writedowns given the state of the UK business and it will negatively affect AMP's profit this year, with a loss of about $500 million predicted. They are holding off revisiting their forecasts until a briefing is held on December 4.
The writedowns include $850 million related to AMP's United Kingdom Financial Services assets, including $600 million for National Provident Institution, plus $350 million relating to the former AMP International business. Standard & Poor's placed AMP credit ratings on credit watch after the announcement.