AMP Limited’s [ASX:AMP] share price fell by over 13% yesterday and is currently sitting at a pitiful $1.86 per share at time of writing.
At just after 11am yesterday morning, the shares were trading hands at double the normal volume, showing that investors are scrambling over one another for an escape route.
The company has had a bad year in general on the back of bad press after the royal commission uncovered dodgy internal practices.
But what’s happened recently that’s got the market in a tizzy?
An unwelcome announcement
AMP announced yesterday that it’s unlikely to pay an interim dividend for the first half of the current year. The fallen giant also revealed that it was unable to sell its AMP Life insurance arm. This was meant to bring in a hefty $3.3 billion, now down the drain.
It’s reported that the failure to make the sale is due, in part, to opposition from New Zealand’s central bank.
Poor financial results have created a vicious cycle over the past several months, where nervous investors are trying to get out as quickly as they can. But this recent news will still pack a painful punch for those loyal to the financial services titan.
The board has told shareholders that it will continue to be sensible about capital managements, and expects to report a ‘Level 3 eligible capital surplus above minimum regulatory requirements’ for the first half.
What’s next for AMP?
It seems that the list of AMP’s problems is a very long one. You’ve got extensive brand damage from the royal commission, restrictions from the financial regulator, poor results for shareholders and an inability to execute business deals.
This spot of bad weather doesn’t look like it will clear up anytime soon.
For Money Morning
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