Financial services provider AMP has put its New Zealand wealth management business back on the block as part of a re-vamp strategy which includes a capital raising of up to A$650 million.

The dual-listed firm announced it would "explore options" to divest the New Zealand business on the back a net loss of A$2.3 billion for its half year to June 30 after writing down the goodwill in its wealth management and AMP life businesses.

AMP reported an underlying net profit of $309 million. Its New Zealand wealth management arm - which includes its KiwiSaver scheme - had operating earnings of $22.7m.

The New Zealand earnings were impacted by the removal of internal distribution fees and product revenues from AMP Life after the businesses were split and the company said on a comparable basis, operating earnings were steady.


The sale of AMP's Life business which includes its New Zealand life business is also back on after the company warned last month that the deal was unlikely to proceed due to issues with meeting Reserve Bank of New Zealand conditions.

Under a revised agreement with Resolution Life the Bermuda-based company will pay A$3 billion to AMP - down from the original sale price of A$3.3b.

That amount will include A$2.5b in cash and $500m in equity with the sale expected to be completed in the first half its 2020 financial year.

The money from the sale would be used to help fund its new strategy - a three year programme to fund growth, cost reductions and fix legacy issues.

AMP chief executive Francesco De Ferrari said: "The capital raising and 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."

The company said it would not declare a dividend for its first half of 2019 but following the completion of the sale of AMP Life it intended to target a dividend payout ratio of 40 to 60 per cent of net profits after tax adjusted for non-cash items.

However the payment of the dividend would remain subject to the performance of the group and thre progress against the new strategy.

Blair Vernon, chief executive AMP Wealth Management New Zealand, said the separation of the life insurance and mature business in New Zealand had been largely completed by the end of June.


"AMP Wealth Management New Zealand is now largely standalone, which positions our business to explore the logical next step of divestment.

"There's no immediate impact on our day-to-day business, products or services, and continuing to serve our clients remains our number one priority."

Vernon said it was now focused on completing an overhaul of its distribution channels which included re-contracting its independent financial advisers.

The New Zealand business has 60 employed advisers including those at its majority-owned subsidiary AdviceFirst.

It also has distribution agreements with 900 adviser businesses, which includes around 2,400 individual distributors.

A AMP Wealth Management New Zealand spokesman said it did not plan to reduce adviser numbers.


"Instead we are focused on the re-contracting of those adviser businesses to the now separated New Zealand businesses of AMP Life and AMP Wealth Management New Zealand, under contemporary independent financial adviser agreements."

AMP had talked about selling or listing its New Zealand wealth management arm as a separate business last year but put it on hold until the life insurance sale was completed.

AMP shares were trading flat on $1.80 on the NZX this morning and have fallen by more than 50 per cent over the last year.