Yahoo Finance Ameriprise Financial Inc (AMP) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Total Revenue: Increased 11% to $4.1 billion.
Earnings: Grew 10% to $878 million.
Earnings Per Share (EPS): Up 16% to $8.39.
Return on Equity: Excluding AOCI, stands at 49%.
Assets Under Management and Administration: $1.4 trillion, up 15%.
Client Assets in Wealth Management: Increased to $954 billion, up 19%.
Transactional Activity: Up 17% in the quarter.
Client Inflows: $8.5 billion.
Wrap Platform Assets: Grew to $522 billion, up 20%.
Bank Assets: More than $22 billion.
Adjusted Operating Net Revenue Per Advisor: Increased 11% to $942,000.
Wealth Management Margins: Nearly 30%.
Variable Annuity Sales: Up 32%.
Insurance Business Sales: Increased 8%.
Asset Management Total AUM: Up 7% to $652 billion.
Asset Management Operating Earnings: Increased 25% to $206 million.
Asset Management Margin: Approximately 35%.
Capital Return to Shareholders: $650 million in the quarter.
Dividend Increase: 10%, quarterly dividend now $1.48 per share.
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide some perspective on the competitive environment for FA recruiting right now? A: James M. Cracchiolo, Chairman & CEO of Ameriprise Financial, Inc., noted that the market is very competitive, with some competitors being somewhat irrational. Ameriprise focuses on recruiting quality advisors who are interested in building productive practices and value the support the company provides.
Q: What trends have you seen in cash balances this April, especially considering the impact of tax season? A: Walter S. Berman, Executive VP, CFO & Chief Risk Officer, mentioned a slight outflow from sweep accounts due to taxes, with some shifting to third-party money markets. However, sweep accounts have remained stable overall.
Q: How do you see the bank net investment income growing in the balance of the year and into next year? A: Walter S. Berman explained that while the growth won't be as high as 30%, the reinvestment of about $3 billion each year at higher rates will continue to contribute positively, albeit at a slowing pace as the year progresses.
Q: Is there any pressure from clients to pass through more short-term interest rate benefits, especially as rates could stay higher for longer? A: James M. Cracchiolo stated that there is no significant pressure since most cash balances are invested in products like money market funds, brokered CDs, and higher savings products, rather than just sitting in sweep accounts.
Q: What kind of margin are you getting on new flows, specifically the $8.5 billion of net inflows to A&WM? A: James M. Cracchiolo indicated that the margin on new flows is consistent with overall business margins, as advisors do not immediately invest all new inflows. He highlighted the potential for higher margins as cash moves back into the market from sidelines.
Q: Can you discuss the slowdown in institutional asset management mandates? A: James M. Cracchiolo acknowledged a slowdown but remains optimistic about growing interest in both fixed income and equities. He attributed some of the slowdown to elongated funding cycles and the loss of some lower-fee mandates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
