Ameriprise Financial Reports Third Quarter 2020 Results
|Earnings Per Diluted Share||Return on Equity, ex. AOCI (1)|
|Q3 2020||Q3 2020|
|Adjusted Operating||$1.47||Adjusted Operating||29.6%|
|Adjusted Operating Ex. Unlocking (2)||$4.27||Adjusted Operating Ex. Unlocking (2)||35.5%|
“I am proud of how well Ameriprise and our team are executing in a challenging environment globally – the business is performing well.
“Ameriprise delivered good financial results, considering the impact of the low interest rate environment. We are generating strong client flows in both wealth management and asset management. Advisor productivity continues to increase nicely, reflecting our excellent advisor support, product solutions and client service.
“Our capital strength and free cash flow differentiate Ameriprise and provide important flexibility – today and looking forward. We’re one of few financial services firms to increase our dividend and resume share repurchases this year while maintaining a strong balance sheet. Even in this uncertain environment, we’re on track to return approximately 90 percent of our full year adjusted operating earnings to shareholders. Additionally, we recently announced a new $2.5 billon share repurchase authorization.”
- Third quarter adjusted operating earnings per diluted share was $4.27 excluding a $2.80 per diluted share unlocking impact that was previously announced, down 1 percent (3) from last year as strong organic growth was offset by the impact of the precipitous drop in short term rates. Excluding the decline in short term interest rates, adjusted operating earnings per diluted share increased 18 percent.
- In 2020, GAAP net income was impacted by market volatility related
to the company’s credit spread, the valuation of derivatives and unlocking. In the quarter, the GAAP net income/(loss) per diluted share was ($1.14) and on a year-to-date basis was $10.73.
- Adjusted operating net revenue was $3.0 billion, a 1 percent decline (3) driven by lower interest rates. Excluding the decline in short-term interest rates, net revenue increased 3 percent.
- General and administrative expenses were well managed, down 5 percent, while still investing for business growth.
- Assets under management and administration reached a new high at nearly $1 trillion from strong organic growth and market appreciation.
- Wrap flows in the quarter reached $5.2 billion and recruiting of experienced advisors reached a three-year record with 99 advisors joining the company in the quarter.
- Global asset management retail net inflows, excluding former parent flows, continue to improve with $1.7 billion of inflows in the quarter from strong investment performance, distribution effectiveness and improved retail sentiment in EMEA.
- Excess capital was $1.7 billion and free cash flow generation was approximately 90 percent of adjusted operating earnings excluding unlocking this year, demonstrating the company’s continued strong balance sheet fundamentals. The company returned $448 million to shareholders in the quarter, with 2.1 million shares repurchased, and announced a new share repurchase authorization of $2.5 billion through September 30, 2022.
(2) Unlocking impacts reflect the company’s annual review of insurance and annuity valuation assumptions and model changes, and the Long Term Care (LTC) gross premium valuation.
The full press release is available for download below. Earnings materials are also available on the Investor Relations site at ir.ameriprise.com.