The AMP Limited (ASX: AMP) share price is going to be under scrutiny today after revealing another soft quarter for March 2021.
AMP’s difficult quarter
The highlight was that its Australian wealth management (AWM) division saw assets under management (AUM) increase by $1.6 billion to $125.7 billion thanks to rising investment markets.
However, AWM suffered from net cash outflows of $1.5 billion, including $448 million in regular pension payments to clients. The outflow slowed from $1.7 billion in the prior corresponding quarter.
The AMP Bank loan book increased by $200 million to $20.8 billion, driven by growth in owner-occupied loans in a highly competitive market.
AMP Capital assets under management (AUM) fell 1.7% to $186.5 billion. AMP Capital external net cash outflows was $1.3 billion, driven primarily by fixed income outflows.
Is the AMP share price worth looking at?
AMP has been disappointing investors for years. Continued cash outflows is a worrying sign. Strengthening markets helps asset values, but that will only stop the inevitable for a while. AUM is going to decline if outflows continue at more than $1 billion a quarter.
At some point AMP’s share price will be better value than its underlying value. But I don’t know what level that is. And how do investors access that value? Its profit direction is disappointing and external investors don’t seem to want to buy parts of the business. AMP management need to turn things around themselves and (continue to?) do the right thing for clients.
There are plenty of ASX dividend shares that may be able to generate more income and capital growth.
