Financial services giant AMP expects first-half underlying profit to more than halve and has blamed this on an expected increase in bad loans and the volatility of the coronavirus pandemic.
AMP said interim underlying profit would fall to between $140 million and $150 million. It had reported underlying first-half net profit of $309 million a year ago.
The profit figures are for retained businesses, after AMP sold its life insurance division earlier this year.
AMP expects to set aside about $25 million to cover potential credit losses at AMP Bank, while performance and transaction fees at investment arm AMP Capital are expected to be 40 per cent lower.
First-half operating earnings are expected to be $60 million for its core wealth management business, down from $103 million a year ago.
AMP Capital is likely to report operating earnings of $70 million, down from $120 million, while AMP Bank will have first half operating earnings of $50 million, down from $76 million).
Chief executive Francesco De Ferrari said the first half results had been impacted by the market volatility of COVID-19, but the business had a strong capital position to respond.
The pandemic hampered efforts to cut costs and ensuring clients were served during this period also meant more spending, the company said.
AMP will provide its interim results on August 13, with the company to also outline how it plans to use cash from the $3 billion sale of AMP Life.
Shareholders have called for a payout after being denied dividends for 2019.