Australia’s AMP has appointed an ex-Treasury head to the board in efforts to rebuild its damaged reputation following a misconduct scandal that saw the financial services firm report a sharp plunge in half-year profit Wednesday.
AMP’s chairman Catherine Brenner quit in April, just weeks after its chief executive stood down in the wake of a national inquiry into the banking sector heard the firm charged clients for advice they never received.
The company’s net profit for the six months to June 30 slumped by 74 percent to Aus$115 million (US$85 million), hurt by an after-tax provision of Aus$290 million to compensate affected clients.
Its preferred measure which strips out one-off earnings, underlying profit, fell seven percent to Aus$495 million.
AMP’s interim chief executive Mike Wilkins said Canberra’s royal commission into financial services had ‘challenged’ the firm’s reputation.
‘While we continue to monitor the impacts, we have taken action to stabilise the business and move forward,’ he said in a statement.
‘Headwinds remain for the second half of the year, but our focus is clear. We’ll continue to prioritise our customers, putting their interests first.’
AMP declared an interim dividend of 10 Australian cents, down from 14.5 cents year-on-year.
Despite the profit plunge, shares in AMP rose 3.43 percent to Aus$3.46 in trading in Sydney Wednesday. The company’s stock has tumbled more than 30 percent since the start of the royal commission in February.
Former Treasury secretary John Fraser will join AMP’s board as a non-executive director from next month as part of its renewal and rebuilding process, the firm said.
The royal commission heard that AMP’s senior executives intervened in the drafting of a supposedly independent report drawn up for the inquiry.
The firm also admitted misleading the national stock market watchdog about the client fee scandal, which affected some 15,700 clients between 2009 and 2016.
The inquiry was set up by the government after public anger over a string of scandals in the massively profitable banking sector.