Ameriprise Financial Reports Second Quarter 2016 Results
Net revenues of $2.9 billion were down 8 percent, reflecting lower average equity markets compared to the year ago and asset management outflows, resulting in lower fee revenue. Net revenues for the current period included revenue of consolidated investment entities of $26 million compared to $141 million for the prior period primarily reflecting the deconsolidation of certain collateralized loan obligations and all property funds in the first quarter.
Expenses of $2.5 billion were down 2 percent as a result of lower distribution expenses and well controlled general and administrative expenses. Expenses also declined as a result of the deconsolidation of certain consolidated investment entities.
Operating net revenues of $2.9 billion were down 4 percent, reflecting lower average equity and other markets compared to the year ago, as well as asset management outflows, resulting in lower fee revenue.
Operating expenses of $2.4 billion were down 1 percent as a result of lower distribution expenses and well controlled general and administrative expenses. General and administrative expenses decreased 1 percent associated with the company’s ongoing reengineering and expense discipline that more than offset unfavorable items in the quarter.
In the quarter, the company continued to deliver a strong return to shareholders through share repurchases and dividends of $571 million. The company repurchased 4.7 million shares in the quarter, up from 3.4 million shares in the year ago period.
“Ameriprise delivered solid underlying results in the second quarter given increased volatility, lower average equity markets and persistently low interest rates,” said Jim Cracchiolo, chairman and chief executive officer. “We are focused on serving our clients and advisors and providing the personal advice and perspective investors need.”
“In this environment, clients remain cautious, which is reflected in slower activity and high cash balances. However, retail client assets increased to an all-time high and we had another strong quarter for experienced advisor recruiting during a time of change for the industry. In Asset Management, we continue to make progress in the U.S. and are implementing our initial plans to manage the post-UK referendum period effectively.
“The strength of our financial foundation and broad capabilities are differentiators for Ameriprise. We continue to invest for growth and return capital to shareholders at a meaningful level. Profitability remains quite strong and we’re delivering one of the highest returns on equity in the industry.”