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AMP Full-Year Profit Rises as Costs Decline, Markets Rebound

Feb. 21 (Bloomberg) -- AMP Ltd., the Australian pension provider, said full-year profit climbed 2.3 percent on tighter cost controls and a recovery in global markets.

Net income rose to A$704 million ($721 million) in the year to Dec. 31 from A$688 million in the year earlier, AMP said in a statement today. Underlying profit, which removes merger-related costs and some of the influence of market volatility, gained 5.1 percent to A$955 million.

Chief Executive Officer Craig Dunn, who has focused on cost cuts to boost the company’s margins, said today that investors were starting to return to equities following a global market rally. Operating earnings at AMP’s wealth management unit surged 21 percent in the second half from a year earlier.

“The performance of the wealth management operations should drive earnings estimate changes upwards,” said Toby Langley, an analyst at Nomura Holdings Inc., in a note to clients today.

AMP shares fell 0.4 percent to A$5.42 at the close in Sydney, trimming their gains this year to 13 percent. The benchmark S&P/ASX 200 Index has climbed 7.1 percent.

The company’s cost to income ratio was 47.3 percent in 2012, down from 47.9 percent in the prior year, AMP said. Assets under management increased to A$173 billion as at Dec. 31 from A$159 billion a year earlier, according to a copy of AMP’s financial statements filed to the stock exchange.

“There is a big turnaround in our net cashflows coming into the business from retail clients,” Dunn said in an interview with Bloomberg Television today.

To contact the reporter on this story: Narayanan Somasundaram in Sydney at nsomasundara@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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