AMP AMP Limited

By Robb M. Stewart

MELBOURNE, Australia--AMP Ltd. (AMP.AU) plans to return up to 500 million Australian dollars (US$381 million) to shareholders after it was pitched to an annual loss by charges against its struggling wealth-protection business.

The Australian financial services firm said Thursday it would buy back shares, beginning this quarter, and would maintain its dividend for the final six months of last year despite notching a loss in its life-insurance arm but better performances in its capital, banking and New Zealand businesses.

AMP reported a net loss of A$344 million for 2016 from a A$972 million profit the year before.

AMP's life insurance arm has struggled with escalating losses, and has previously warned industry conditions deteriorated consistently last year, as claims have escalated and policies have lapsed.

Last October, it said the underlying earnings of its wealth-protection business would be hurt by A$500 million due to capitalized losses and force it to book a goodwill impairment of about A$668 million to reflect the decline of its embedded value. The next month, it shuffled its senior leadership team, including replacing the insurance executive and restructuring business lines.

Chief Executive Craig Meller said the planned buyback and steady dividend reflected AMP's strong capital position and positive outlook for its business.

Its wealth-protection business recorded a A$415 million loss against a year-earlier profit of A$185 million, while the Australian wealth management operations saw earnings slip 2.2% to A$401 million. AMP Bank saw the strongest growth, with earnings rising 15% to A$120 million, while the New Zealand financial services unit grew its profit 5% to A$126 million.

AMP said it planned a final dividend of A$0.14 a share, for a full-year payout of A$0.28.

The company said it remained in a strong position with a A$2.3 billion capital surplus on Jan. 1.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

February 08, 2017 16:24 ET (21:24 GMT)

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