AMP Bank says $19.4m loss includes cost of shift back to Sydney

By KEVIN TAYLOR

AMP Bank says its New Zealand branch's $19.4 million loss in the nine months to September includes one-off restructuring costs.

The loss is revealed in disclosure statements filed with the Reserve Bank. It compares with a $14.9 million loss in the nine months to September 2000.

The bank's Australia and New Zealand head of retail banking, Michael Guggenheimer, said the $19.4 million loss included one-off expenses related to changes to its operations.

But he declined to reveal how much of the loss was related to restructuring.

AMP Bank, which has been struggling to make money since setting up in New Zealand as Ergo in 1995, said in September 2000 that it was closing most of its New Zealand operations and running the business out of Sydney.

The shift cost about 150 of the direct banker's 200 New Zealand-based jobs.

The bank said the changes were made because it was more efficient for the business to share back-office operations with the company's bigger Australian operation.

Mr Guggenheimer said he was limited in what he could say about the bank's results ahead of a "blackout period" before the parent AMP group's annual result was released on February 27.

He declined to give an indication of what the bank's result would be before the announcements, other than to say it would be in line with expectations.

He said the changes in the bank's operations were expected to yield reduced operating expenses.

"To make the changes, obviously we have had to have some expenditure that we expect will be non-recurring. Therefore that's reflected in those numbers."

He said there were several benefits from centralising back-office operations.

"We had duplicated resources in both Australia and New Zealand. There's obviously a lot of economies and benefits that you can derive putting two small operations together and making it one large operation."

Business development and marketing staff were still based in New Zealand, Mr Guggenheimer said.

He said AMP Bank's New Zealand branch was an integral part of the bank's business.

"We have taken a one-off decision last year in terms of centralising back the operations, and that was an efficiency issue.

"To me, that's an indication of our commitment to the market. You wouldn't have gone through all that if you were not committed to the market."

He said banking was an integral part of the AMP group's operations in New Zealand as well.

AMP Bank operates in Australia, New Zealand and Britain. The September disclosure statement showed that the New Zealand branch had $2.8 billion in assets.