AMP's troubled wealth business lost at least $19.4 billion in assets under management in the first three months of 2020, as volatile financial markets added salt to the wounds of its continuing customer exodus.
In an update to the market on Thursday, AMP reported assets under management (AUM) of $116.3 billion in its Australian wealth management operations as at March 31, down from $134.5 billion in December.
The business includes its retail superannuation assets and client money managed by the shrinking financial planning network.
The New Zealand wealth business, which AMP has indicated it will sell, lost $1.2 billion, amounting to a 9.8 per cent decline in its total AUM.
Fund manager AMP Capital – which in 2019 was the only AMP business unit to experience a positive earnings trajectory, largely off the back of rising fee income from unlisted assets – was also hit, with its AUM down $10.7 billion to $192.4 billion.
AMP chief executive Francesco De Ferarri told investors the dwindling pool of managed assets was primarily a function of the coronavirus downturn.
"Markets in Q1 were extremely volatile, particularly in March, with significant falls in equities, fixed income and key commodities impacting our assets under management," he said.
"We have seen some recovery since the quarter end, but expect market volatility to continue and the economic impact of the pandemic to emerge over the remainder of the year."
Bell Potter analyst Lafitani Sotiriou told clients it was a "surprisingly resilient" result, having anticipated closing wealth management AUM of $112.4 billion, 3.5 per cent lower than reported.
"Overall this is a solid update in the current environment," Mr Sotiriou wrote. "AMP flagged about a month ago that its balance sheet and capital remain sound, we anticipate more detail at the annual general meeting in two weeks to provide more detail."
However, in addition to the market conditions, overall declining assets were also a symptom of continuing and significant cash outflows.
The wealth business saw $7.7 billion fly out the door over the three-month period, offset by inflows of $5.8 billion which benefited from a 41 per cent increase in flows to AMP's North wealth management platform.
A total of $1.2 billion of outflows were attributed to ceased corporate superannuation mandates, pension payments to clients and the Protecting Your Super legislation, which affected superannuation insurance income.
That left $5.9 billion in outflows unaccounted for, likely a result of continuing organic movement away from AMP by both superannuation members and advice clients in the aftermath of the Hayne royal commission.
The diminishing AUM will also have been exacerbated by the declining ranks of financial advisers licensed by AMP, although its formal and controversial cull of practices has yet to take full effect.
AMP's banking arm was a rare bright spot, growing its loan book over the period by $162 million and deposit pool by $773 million.
"Amid the uncertainty, I'm pleased we are showing up strongly for our clients and demonstrating the resilience of our business,"said Mr De Ferrari.
"During this time of uncertainty, we have focused on supporting our clients whilst working to continue to execute on our strategy. We’re responding to a record level of client enquiries for advice and support as people weigh up important financial decisions."
The results follow Mr De Ferrari sharing details of the personal impact of the COVID-19 crisis with the Australian Financial Review Banking & Wealth Summit crisis briefing in March.