The AMP Ltd (ASX: AMP) share price has been on a really strong run. In the last six months, it's up 42% and in the past 12 months it has gone up 23%, as the chart below shows.
The company's core operations relate to banking and wealth management, so it's competing with a wide range of businesses such as Macquarie Group Ltd (ASX: MQG), Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ).
Let's take a look at what the latest update from the company looked like.
Image source: Getty Images
FY25 half-year result
For the first six months of 2025, the company announced that its underlying net profit after tax (NPAT) grew by 9.2% to $131 million, up from $120 million in HY24. Pleasingly, the underlying earnings per share (EPS) increased 18.2% to 5.2 cents, thanks to the improved earnings and the final stages of the AMP share buyback.
Platforms underlying NPAT grew 7.4% to $58 million, superannuation and investments underlying NPAT was steady at $34 million, AMP Bank underlying net profit grew 2.9% to $36 million, and New Zealand wealth management underlying net profit increased 11.8% to $19 million.
A sizeable portion of the profit improvement came from a 4.4% reduction of controllable costs to $303 million. This development showed continued cost discipline.
The company's board of directors decided to declare a dividend per share of 2 cents, which was in line with guidance.
What are the pros and cons of buying at this AMP share price?
When a business' valuation rises rapidly, the company may become too expensive, or at least not as cheap anymore.
AMP is not the sort of business that's going to drive profit higher strongly, year after year. So, large gains like we've seen recently seem like a one-off to me because of the increased price-earnings (P/E) ratio, making the business less appealing to me.
There is a huge array of financial businesses that are competing with AMP in banking. Not just the big four banks and Macquarie, but a number of other lenders like Pepper Money Ltd (ASX: PPM), Bendigo and Adelaide Bank Ltd (ASX: BEN), Bank of Queensland Ltd (ASX: BOQ), Mystate Ltd (ASX: MYS), and so on.
It's going to be challenging for AMP to grow its market share, margins or both on the banking side. There's also strong competition on the investments side too.
However, there are a few positives for the business, beyond simply positive movements for the net profit figure. In a note, UBS recently wrote:
Rising markets sees EPS upgrades and lift in PT to $1.85. We remain Neutral, but the stock is looking more interesting as an FY26 story given (i) improving flows, (ii) digital SME bank driving lower funding costs, (iii) potential further cost reduction, and (iv) potential for FY26 capital management.
A price target of $1.85 implies a possible rise of 13% over the next year, if UBS is right. That could be a decent return, particularly when adding in the dividend return. But it's not the first ASX share I'd buy tomorrow.
