Ameriprise Financial(US:AMP)2023-04-25 17:09Financial Data and Key Metrics Changes - Ameriprise reported revenues of $3.7 billion for Q1 2023, a 3% increase year-over-year, with pre-tax adjusted operating earnings up 20% and EPS up 25% to $7.25 [8][19] - Return on equity, excluding AOCI, was 50%, maintaining one of the best rates in the financial services sector [8][19] - Assets under management and administration (AUMA) ended at $1.2 trillion, down 8% from the previous year due to market depreciation and foreign exchange impacts [21][19] Business Line Data and Key Metrics Changes - Wealth Management earnings grew 58% year-over-year, representing 66% of the firm's adjusted operating earnings, up from 49% a year ago [19][8] - Retirement & Protection Solutions saw an 11% increase in earnings, driven by higher investment yields from portfolio repositioning [19][14] - Asset Management faced challenges with a 13% decline in assets under management to $608 billion, primarily due to market depreciation and negative foreign exchange impacts [15][27] Market Data and Key Metrics Changes - Client inflows in Wealth Management were robust, exceeding $12 billion in the quarter, an 18% increase year-over-year [9][22] - Total outflows in Asset Management were $1.7 billion, with U.S. retail experiencing net outflows due to market volatility [15][27] - The firm reported strong growth in institutional inflows of $2.8 billion, driven by fixed income and real estate [15][16] Company Strategy and Development Direction - Ameriprise focuses on diversifying its business model, with Wealth Management as a key driver, complemented by Retirement & Protection Solutions and Asset Management [7][19] - The company is expanding its banking operations, having grown deposits to $20 billion and launched new savings products to attract client cash [11][12] - The firm aims to enhance its client and advisor value propositions, evidenced by high client satisfaction ratings and advisor retention [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating environmental uncertainties and highlighted the stability of their deposit base and investment portfolio [6][7] - The firm anticipates continued strong client flows and engagement, supported by new technology and tools for advisors [10][44] - Management remains optimistic about future growth opportunities, particularly in Wealth Management and the banking sector [17][19] Other Important Information - Ameriprise returned $641 million to shareholders in the quarter, marking an 80% return of operating earnings [17][20] - The company has been recognized for its customer service and trustworthiness, receiving multiple awards in 2023 [12][13] Q&A Session Summary Question: Outlook for net interest income (NII) and cash management - Management confirmed that the current level of NII can be maintained, with opportunities to shift more funds into the bank for higher profitability [34][35] Question: Update on the Comerica partnership and asset transfer - The partnership is expected to bring approximately $18 billion in assets, with a mix of various asset types [50][51] Question: Advisor recruitment and retention amid market conditions - Management reported strong advisor retention rates and a good pipeline for recruiting new advisors, emphasizing the firm's stability [47][48] Question: Expectations for cash balances and deployment - Management indicated that while cash balances are stable, there is potential for increased deployment into market investments as volatility settles [70][72]