It's been a bit of a jumpy day for the S&P/ASX 200 Index (ASX: XJO) and ASX shares. At the time of writing, the ASX 200 has gained a shaky 0.06% or so to 7,486 points, after rising as high as 7,516 points earlier this morning. But that's nothing compared to what the AMP Ltd (ASX: AMP) share price is doing.
The ASX 200 financial services company is performing far better than the broader market today. At present, AMP shares are going for $1.36 each, up a healthy 2.26% so far today. For what it's worth, that's a gain worth more than 16 times that of the ASX 200.
So why are AMP shares doing so well this Tuesday?
Image source: Getty Images
Why are AMP shares topping the ASX 200 this Tuesday?
Well, it's not entirely clear. But it could have something to do with the big development the company announced this morning.
In a press release, AMP has announced the acquisition of Nano Digital Home Loans.
Nano was a digital-only bank and home loan provider, but it now seems that its primary business has been swallowed up by AMP.
It is the latest so-called 'neobank' to succumb to the dominance of the larger banks in Australia's financial system. Last year, another neobank, 86 400, was taken over by National Australia Bank Ltd (ASX: NAB).
AMP's acquisition of Nano's home loans will reportedly add around $400 million in loans to AMP's business. These loans consist of "primarily owner-occupied, principal and interest loans, with strong credit quality", according to AMP.
Nano isn't completely folding but, according to AMP, "The agreement also delivers on Nano's strategy to focus on being a provider of technology to financial services companies rather than a home loan provider".
The loan book transition will occur by March 2023.
Here's some of what AMP executive Sean O'Malley had to say on this deal:
We're pleased to welcome Nano's customers to AMP Bank, and we look forward to continuing to support them with competitive interest rates, strong customer service, and provide access to more banking products to help them achieve their goals.
The continued strong growth of AMP Bank has been largely organic… However, in line with our objective to grow the bank and increase our direct to customer channel, we will continue to consider acquisition opportunities where they make strategic sense and maintain the high quality of our loan book.
After many years of disastrous returns for shareholders, the AMP share price seems to have turned a corner over the past year or so. The company is now up more than 50% from the all-time low of 86 cents a share that we saw in 2022. AMP is also up by a solid 4% in 2023 to date.
