Ameriprise Financial, Inc. (AMP) reported second quarter 2022 results this morning. Adjusted Earnings Per Share (EPS) was $5.81, up 10% from $5.27 in the prior year. Here are five things you should know about this call:
- Total assets under management and administration declined 3% to $1.2 trillion. AMP benefited from the acquisition of BMO Financial Group’s (BMO) EMEA Asset Management business and the cumulative impact of AMP client net inflows, but assets were affected by a negative foreign exchange and the steep decline in both equity and fixed income markets. Adjusted operating earnings were up 4% to $665 million, compared to $639 million the prior year.
- The BMO business contributed to AMP’s geographic diversification, with international assets now representing 36% of assets under management up from 27% prior to the BMO acquisition. AMP continues to benefit from strong underlying organic growth momentum with $69 billion of wealth and asset management flows over the last 12 months.
- Net revenue grew 3% to $3.5 billion, as market depreciation and elevated volatility in the quarter were more than offset by business growth and higher interest earnings. The Advice & Wealth Management sector saw total client new inflows shrink by 10% to $8.6 billion, but AMP considered this good given the tough market environment.
- Chairman of the Board, James Cracchiolo, said as AMP moves through the second half of 2022 and into 2023, the growth of their cash business and rising interest rates will provide an offset to equity market weakness. He stated, “First, we’re beginning to generate more revenue from our off-balance sheet cash as the Fed increases short-term rates. Second, we continue to move more assets to Ameriprise Bank garnering additional spread, including moving $2.3 billion to the bank late in the second quarter. For perspective, total bank assets are now at $17.1 billion. Assets have more than doubled since the beginning of 2021, and we’re positioned to take this further.”
- Overall, AMP remains in a strong position. AMP has a proven track record of navigating tougher times and will continue to do so. From a financial perspective, rising interest rates will act as an offset to compressed markets as we move through the year. AMP continues to generate strong returns and substantial free cash flow. In the quarter, AMP returned $600 million to shareholders and is on track to return 90% of adjusted operating earnings to shareholders in 2022.
To learn more visit – Ameriprise Financial Reports Second Quarter 2022 Results
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