AMP Ltd (ASX: AMP) shares have had a really difficult period over the past several months – in 2023 to date it has fallen 27%. Could 2024 get better for this beaten-up ASX financial share?

Latest insight
While investors shouldn't forecast that the latest financial performance will be repeated for the long term, it's the most up-to-date information investors can go off to value AMP shares.
The latest update from the company was for the three months to September 2023.
It said AMP Bank's total loan book grew by $0.5 billion to $25 billion, while total deposits increased by $0.8 billion to $22.1 billion.
Platforms net cash flows were $426 million, excluding regular pension payments to members, down from $748 million in the third quarter of 2022.
North inflows from independent financial advisers increased 17% year over year to $565 million.
The platforms assets under management (AUM) were the same in the 2023 third quarter as the 2023 second quarter, at $68.3 billion
AMP said its master trust cash flows and AUM reflect the $4.3 billion mandate lost last year that transferred in August, with negative net cash flows of $4.9 billion.
Finally, the New Zealand wealth management KiwiSaver saw net cash flows of $59 million.
In most areas, the company saw growth, which is a positive thing.
AMP Bank also recently announced it was launching a new digital bank designed for small businesses. The solution will be built in FY24 and launched in the first quarter of 2025. This will require an investment of approximately $60 million across FY24 and FY25.
Expectations for AMP shares in 2024
The broker UBS was not exactly enthused by this new digital bank. It's expecting bank volume and margins to "fall before possibly improving from FY26 onwards".
UBS said prioritising deposit gathering makes sense given AMP's low net interest margin (NIM) and cost of funding challenges with margin pressures accelerating in the second half of 2023. There is a rising cost of funding with low-cost transaction accounts contributing less than 10% of deposits, according to UBS – the new digital small business bank is targeted at addressing this funding gap.
But, until this new business reaches scale, possibly in FY27, UBS thinks deposit competition will remain "intense" and the AMP funding mix will "deteriorate further".
UBS said the company plans to defend its return on capital (ROC) by slowing loans to "nominal" growth during FY24, which the broker thinks means "flat at best".
In terms of the AMP share price, UBS has a sell rating on the ASX financial share. The price target – a guess of where the broker thinks the share price will be in 12 months – is now 82 cents. At the current AMP share price, that implies a potential fall of 14%.
In terms of profit estimates, UBS has forecast that AMP could generate $192 million of net profit, which would be 7 cents of EPS and pay a dividend per share of 5 cents. That would put the AMP share price at more than 13 times FY24's estimated earnings with a forward partially franked dividend yield of 5.25%.