AMP sticks with banking strategy

AMP Ltd is slowly making headway in the banking game. In the five months since going public, it has some noteworthy achievements. It now has assets of around $2 billion and a growing home loan portfolio of $900 million (about half that of Citibank and of similar size to Bank of Queensland by comparison). AMP aslo recently attained a customer base for its credit card product of 100,000.

It’s part of a plan formulated some two years ago and recent Merrill Lynch estimates are that AMP’s banking operations have cost around $120 million since 1996 with the launch of AMP Priority One. As business returns head back to the black in 2002, a further $100 million will have been expended.

Credit cards are just one part of an integrated bundle of products offered together with the usual transaction accounts and mortgages in conjunction with its other financial service products. Head of AMP Financial Services, Mr Ray Greenshields notes that AMP is simultaneously looking for a deeper customer relationship in terms of intensity of contact whilst having a broader relationship in terms of product offerings. In other words it’s a case of building business and returns through solid connections rather than mere product margins.

It’s a practical outlook given the commodity type nature mortgages are beginning to assume. Overall, AMP’s bundled products are designed to support customer investment decisions, whilst retaining investment and superannuation business which may otherwise be poached by its competitors.