The AMP Ltd (ASX: AMP) share price is in focus today after the company announced changes to its cost allocation and cost-to-income methodology. AMP reported underlying NPAT of $236 million and revenue of $1,252 million for FY24.
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What did AMP report?
- FY24 revenue: $1,252 million
- Underlying net profit after tax (NPAT): $236 million for FY24
- Total controllable costs: $648 million in FY24
- New cost-to-income ratio methodology; restated FY24 CTI at 67.6%
- Re-allocation of $48 million in FY24 costs from Group to business units
- Controllable cost guidance for FY26: $630–$640 million
What else do investors need to know?
AMP has overhauled how it allocates costs following its Business Simplification program. The business unit results for prior periods have been restated, but this doesn't affect group-wide NPAT or overall controllable costs.
The updated cost-to-income (CTI) ratio methodology, now aligned with industry peers, removes some investment income from the calculation. This offers a more apples-with-apples comparison for investors.
AMP is sticking with its cost guidance for FY25, while FY26 costs are expected to rise moderately to account for inflation and the expansion of AMP Bank GO.
What's next for AMP?
Looking ahead, AMP expects to keep FY25 costs in line with prior guidance, while projecting a slight increase in FY26 as it invests in scaling up its banking operations and responds to inflationary pressures.
Management believes these changes will give investors a clearer, more meaningful picture of how AMP's business units are tracking, and supports the company's focus on ongoing simplification and efficiency.
AMP share price snapshot
Over the past 12 months, AMP shares have declined 3%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.
