AMP Abandons International Pretensions

by Mary Swire, Investors Offshore, Hong Kong

18 November 2002

Australian funds management and retail financial services group AMP has bowed to the inevitable and announced a wide-ranging cutback for its international operations in an attempt to return to profitability.

Chief Executive Andrew Mohl said in a statement to the Australian Stock Exchange: "The business needs to change - to become more efficient, more productive, more competitive and more cost effective." He pledged to tackle sacred cows and restructure the company's operations; AMP's share price has almost halved this year as a result of its equity losses in British markets, and capital adequacy problems at its Pearl Assurance unit.

AMP will stop manufacturing its own bank products in Britain and New Zealand, and look for alliances in the banking markets instead. Many international operations will be cut back, with the Singapore office to be closed and the Beijing office reduced in size and scope. There was no immediate news regarding other international offices, including those in Dubai, Cyprus, Hong Kong or Luxembourg, apart from onshore offices in a dozen other countries.

AMP will sell its property finance business and its British and New Zealand mortgage books, and has already entered into negotiations with partner American Express on selling its credit card portfolio.

AMP had already announced 1,500 staff cuts in Britain in response to the problems facing its Pearl Assurance, National Provident Institution and Henderson Global Investors units.

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