AMP Profits Rebound on Strong Growth, Cost Reductions

February 28, 2001

Australian insurer AMP announced that its net after tax profit had rebounded sharply to A$1.152 billion ($604 million) for the year 2000, following 1999’s $225 million loss. The company cited strong growth in its international business and continued efforts to control costs as the principal reasons for the turnaround.

Commenting on the results CEO Paul Batchelor stated, “The growth in profit is sustainable and demonstrates the strength and balance of our businesses worldwide. Underlying profit before investment income – our core operating margins – is up 65% on last year.”

AMP has apparently solved the problems it took on last year to integrate the operations of troubled insurer GIO following its purchase. It announced that cost savings of $73 million, a two year target, had been achieved in just seven months of operation.

Growth in all sectors of its insurance business and asset management enabled AMP to achieve a 14.3 percent return on equity in 2000, a remarkable turnaround from the negative return of 5 percent it recorded last year.

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