ASX Announcement. AMP Bank shareholder offer. 1 September Announcement No: 46/06

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1 ASX Announcement 1 September 2006 Manager Company Announcements Office Australian Stock Exchange Level 4, 20 Bridge Street Sydney NSW 2000 Manager Market Information Services Section New Zealand Stock Exchange Level 9, ASB Tower, 2 Hunter Street Wellington New Zealand Announcement No: 46/06 Part One: Part Two: AMP Shareholder news AMP Bank shareholder offer

2 shareholder news Feature: AMP s 2006 half-year results

3 message from the chairman Dear shareholder It is almost a year since I became Chairman of AMP and I m pleased to be able to report to you on another solid six month performance. This builds on our strong financial performance over the past two years. Underlying profit in the first half of 2006 increased by seven per cent on the same period in 2005 to $420 million. This reflects our commitment to growing revenue strongly, keeping costs under control and managing capital well. During the quarter from April to June, AMP recorded its strongest second quarter cashflows on record. Investment performance was also well above benchmark across the board. Dividend Your board has declared an interim dividend of 19c a share, up from 14c a share in the first half of The dividend will be 85 per cent franked, up from 75 per cent in The dividend will be paid on 24 October 2006.

4 The interim dividend brings the total value of cash distributed to shareholders in 2006 to 77c a share. This includes the final 2005 dividend of 18c a share distributed in April and the capital return of 40c a share distributed in June. Capital return in 2007 AMP s robust balance sheet currently supports another capital initiative in The form, timing and size of this initiative has yet to be determined and is likely be announced with the annual results in February Progress on our medium-term goal AMP s continued good financial performance has also enabled us to bring forward our medium-term goal. In June 2005, your board set a goal of doubling the value of an investment in the company by mid We now aim to achieve that goal by mid This target is measured by increases in enterprise value, plus the value of dividends and capital returns paid to shareholders. Enterprise value is the median of the major stockbroking analyst valuations of AMP in each year. The group s value as defined in the medium-term goal grew by 40 per cent in the year to June Outlook Our focus on running the business better than it s ever been run before to create value for shareholders is working. The market environment is favourable and the demand for value for money products and professional investment advice has never been greater, particularly with the favourable changes to superannuation savings announced in the May Australian Federal Budget. Our industry is not without challenges. AMP Financial Planning recently offered an Enforceable Undertaking (EU) to the Australian Securities & Investments Commission (ASIC) to improve our advice processes and procedures when advising clients on switching superannuation funds. We believe that this is a salutary reminder that the expectations of consumers are continually rising and we must strive to meet them. If higher standards and more choice for clients are the end outcome, then that can only be positive for our industry and our business. (More details about the EU and our response can be found on the AMP website at Your board and management will continue to focus the company on delivering value to our customers and clients, and creating value for our shareholders. Regards Peter Mason, Chairman

5 2006 half-year results at a glance Net profit attributable to shareholders Underlying profit Interim dividend 7% AMP delivered a net profit attributable to shareholders (after income tax) of $424 million, up $27 million on its result of $397 million in the first half of This excludes accounting mismatches of $77 million ($5 million in 2005). 7% 36% Underlying profit in the first half of 2006 grew to $420 million from $392 million in June The interim dividend is 19 cents a share, up 36% on the interim dividend for The dividend will be 85% franked and paid on 24 October this year. Progress on medium-term goal In August 2005, AMP announced its intention to double the value of an investment in AMP between mid 2005 and mid This goal implied average growth of 15% per year. Strong performance since then means we now aim to achieve this goal by AMP s value at June 05 June 06 $11.6b $16.2b Change 40% rise in 12 months Dividend $ per share First half Second half Key performance indicators Return on equity (underlying) Operating earnings Cost to income ratio Investment performance Value metrics 3.7pts 15% 1.8 percentage point fall on 1H05 84% of Australian assets under management met or exceeded their benchmarks AMP Financial Services value of new business up 22% AMP Financial Services embedded value, before transfers, up 12% on FY05

6 providing you with choice One of the challenges of keeping 880,000 shareholders informed is how quickly and efficiently we communicate with you. Posting information to all shareholders is a lengthy and costly process. So we are looking at ways to provide you with relevant and timely information about your shareholding, in a form which best suits you and that is cost effective for AMP. These are some of the options Shareholder Review (yellow) 16 pages A5. Simpler, shorter, clearer Concise Report (blue) 64 pages A4. Traditional financial reporting Website The AMP shareholder website provides the latest news about AMP, information about your dividends and key dates. You can manage your shareholding through the site, such as updating your personal details. Read on screen, or download to your computer, ASX releases and presentations made by AMP senior management. Electronic communication You can elect to receive all of your shareholder information by including dividend statements, annual reports and newsletters. You can vote on the annual general meeting resolutions online too. The documents are presented in an easy to read format, and do not require large files to be loaded onto your personal computer. The key benefits of electronic communication are that it is quick and cost effective. Register your address at and see the benefits of receiving your communications electronically. Annual reports Due to the requirements of reporting guidelines, the AMP concise annual report has grown to 64 pages. Shareholders who read the annual report have told us they usually only read the first 10 pages. The same research tells us that 27 per cent of shareholders don t open their annual report pack at all. As an alternative to the concise report, we ve developed the Shareholder Review a 16 page summary (the same shape as this newsletter) of the key annual results, including the Chairman s and CEO s reports, key financials and board and executive remuneration. You can receive the Review in printed or electronic format instead of the concise annual report. The choice is yours If you currently receive the 64 page printed concise annual report and want to receive the Shareholder Review instead, please ring the AMP Securities Registry. Phone numbers are on the back page. If you would like to register to receive your communications by , go to

7 shareholder information Changes to the Dividend Reinvestment Plan In July, your board amended some of the terms of the AMP Dividend Reinvestment Plan (DRP). These changes are designed to improve the administration of the DRP and ensure the Plan remains cost effective. All shareholders who participate in the DRP should have received notification in late August. Full details of the changes are available on the AMP website at If you are interested in joining the DRP, please go to the website for details, or contact the AMP Securities Registry on the numbers listed in the blue panel (see right). Share Sale Facility AMP has established a Share Sale Facility to offer Australian retail shareholders who hold small parcels of shares the opportunity to sell those shares with no brokerage fees. This Sale Facility ensures shareholders who want to sell their small parcels of shares receive market value. Australian shareholders who hold 400 shares or less (as at 18 August 2006) should have received information about the Sale Facility with this newsletter. If you live in New Zealand or the United Kingdom, and are interested in selling your AMP shares and do not have a broker, please contact the AMP Securities Registry to discuss sale facility options. Contact details are listed in the blue panel. For more information go online The AMP shareholder centre has a wealth of information for AMP shareholders. You can update your details, view information about the AMP share price, access financial reports and read the latest AMP news. You can also find information about AMP s business, board and senior management team and community involvement on the AMP website. Visit Upcoming dates 25 SEPTEMBER 2006 EX-DIVIDEND DATE FOR INTERIM 2006 DIVIDEND (AUSTRALIA) 29 SEPTEMBER 2006 RECORD DATE FOR INTERIM 2006 DIVIDEND 2 OCTOBER 2006 EX-DIVIDEND DATE FOR INTERIM 2006 DIVIDEND (NEW ZEALAND) 24 OCTOBER INTERIM DIVIDEND PAYMENT DATE FEBRUARY 2007 (DATE TO BE CONFIRMED) 2006 FULL YEAR RESULTS ANNOUNCED Need help? CONTACT THE AMP SECURITIES REGISTRY AUSTRALIA AMP SECURITIES REGISTRY REPLY PAID 2980 MELBOURNE VIC 8060 PHONE: FAX: NEW ZEALAND AMP SECURITIES REGISTRY P O BOX AUCKLAND MAIL CENTRE PHONE: FAX: OTHER COUNTRIES AMP SECURITIES REGISTRY GPO BOX 2980 MELBOURNE VIC 3001 PHONE: FAX: INTERNET shareholdercentre ampservices@ computershare.com.au

8 AMPB 1351 easysaver DL#3.qxd-3 17/8/06 3:54 PM Page 1 THE BUCKS START HERE. 6 %.55p.a.* 6 month introductory bonus rate of 0.75% p.a. above standard rate.

9 AMPB 1351 easysaver DL#3.qxd-3 17/8/06 3:54 PM Page 2 An AMP Banking easysaver account can make your money work even harder for you. No minimum opening deposit Monthly interest and no bank fees Funds at call Fast and secure 5 min online application Opening an account is easy: Call (8am 8pm AEST) to open an account over the phone or apply online at amp.com.au/shareholderesa. Your new account can be credited with funds from the sale of shares if you provide your SRN when calling or applying on line. * Rate subject to change and correct at 4 September After the 6 month introductory period expires, the rate reverts to the standard easysaver rate of 5.80% p.a. effective 4 September 2006 and subject to change. Maximum opening and ongoing deposit of $500,000 per customer during intro rate period. Not to be used in conjunction with any other bonus or intro rate for deposit accounts. Terms and conditions available on request. Fees and charges apply for special services. Not available to customers who are currently holding or have previously held an easysaver account within the last 3 months. Personal customers only (individual and joint). Available to Australian Residents only. The product issuer is AMP Bank Limited ABN , AFSL As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on this advice, consider its appropriateness for your circumstances. A Product Disclosure Statement is available by calling or by visiting and should be considered in any decision about the product. AMPB1351