Banking News

S&P views streamlined AMP positively

S&P views streamlined AMP positively

(6 July 2004 – Australia) Ratings agency Standard & Poor’s has revised its rating outlook on AMP Life Ltd, AMP Group Holdings Ltd and AMP Bank Ltd to positive from stable. AMP Life is now rated A+/Positive; AMP Group Holdings and AMP Bank are rated BBB+/Positive/A-2.

S&P said the revised outlook reflected the improved financial structure and quality of capital of the AMP group as a result of demerging its UK business plus a material reduction in debt and hybrid securities.

S&P went on to say it expected completion of the demerger to lead to more supportive operational conditions and that AMP’s "refocused strategic model, new business levels" would improve profitability in 2004.

"Key to any change in the ratings on AMP’s subsidiaries, therefore, will be evidence of a consistent and successful strategy, and sustained earnings performance for the group as a whole," S&P credit analyst Kate Thomson said.

"AMP’s subsidiaries could migrate to a higher credit standing, but this will depend on AMP demonstrating a sustainable, adequate level of earnings, a dynamic competitive position and business flows, a strong capital position, and low gearing levels," she said.

Thomson said AMP’s extensive distribution network and high profile brand in Australia and New Zealand should underpin earnings and support financial strength.
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