AMP has announced a range of initiatives aimed to reposition it for the future, including a $650 million capital raise to reinvent its wealth management offering.
Releasing its 1H19 results today, AMP has launched a $650 million capital raise to fund a new three-year plan - to be implemented immediately - to create a simpler, client-focused business to ensure higher growth and higher return.
The group said part of the plan will involve the reshaping of aligned advice and simplifying superannuation to fix legacy issues and reduce costs.
It is hoped the initiatives will see an annual cost-saving of $300 million by FY22, AMP said.
The plan would also see AMP further integrate AMP Bank and wealth management as well as grow contemporary solutions in the wealth division.
"We are reinventing our Australian business to deliver a proposition that fulfils client needs with whole-of-wealth solutions including banking," AMP chief executive Francesco De Ferrari said.
The group's culture will also be overhauled to one that is client-led, entrepreneurial and accountable, with effective management of financial and non-financial risks.
Additionally, AMP will seek to grow AMP Capital through differentiated capabilities such as real assets and public markets, as well as pursuing international growth opportunities.
The capital raise is intended to strengthen AMP's balance sheet to accommodate the new strategy. It is open to sophisticated and institutional shareholders, as well as investors in Australia and certain overseas jurisdictions.
The final placement will represent about 433 million new shares or 14.7% of AMP's existing issued capital. The raise is anticipated to be complete by mid-September.
"The capital raising and the AMP Life sale will provide the funds to implement immediately our new transformational strategy, which creates a simpler, higher-growth and higher-return AMP that's focused on clients and ensures that our balance sheet will be unquestionably strong," De Ferrari said.
Also announced, AMP has revised the terms of the AMP Life sale, saying the new agreement with Resolution Life provides greater certainty of execution and an implied value of $3 billion. The sale, which failed to meet necessary regulatory approvals last month, is now expected to be completed in the first half of next year.
The proceeds of the sale will also underpin the new strategy, while AMP said it will also assess all capital management options with the intent of returning excess surplus to investors.
AMP said it will also look to further localise New Zealand wealth management, including exploring options to divest.
De Ferrari said 2019 is a year of transition for AMP as it fundamentally resets and de-risks the business.