It has been yet another day to forget for the AMP Limited (ASX: AMP) share price.
In early afternoon trade the embattled financial services company's shares have dropped 6.5% to $2.28 following the release of its full year results for FY 2018.
This decline means that AMP's shares are trading within sight of their 15-year low of $2.14.
Why is the AMP share price sinking lower?
Investors have been heading to the exits in their droves on Thursday after the company reported a 55% decline in revenue from ordinary activities to $8,286 million and a staggering 97% drop in full year net profit.
In FY 2018 AMP posted a net profit of $28 million, compared to the $848 million it achieved a year earlier. Though it is worth noting that AMP's profits were impacted by advice remediation costs of $469 million and Royal Commission costs of $32 million.
On an underlying basis AMP's performance wasn't quite as bad, with underlying profit falling 35% to $680 million.
Unsurprisingly, this poor performance has led to the AMP board cutting its interim dividend. AMP will pay a 4 cents per share 90% franked interim dividend to shareholders, down from 14 cents per share in the prior corresponding period.
AMP's chief executive officer, Francesco De Ferrari, appeared disappointed with the company's performance, but optimistic on the future.
He said: "2018 has been a challenging year for AMP. Our core businesses have delivered resilient results, with continued growth in AMP Capital and AMP Bank offsetting the headwinds faced in Australian wealth management."
Before adding: "2019 will be a transitional year as we prioritise the complex legal separation from the businesses sold to Resolution Life, and deliver on our commitments to remediate advice customers and strengthen our risk management, governance and controls. Delivery on these priorities is a precondition to set a strong foundation for future growth."
Should you invest?
While AMP's shares do look reasonably cheap, I'm not convinced that its turnaround will be swift due to the brand damage caused by the Royal Commission.
In light of this, I would suggest investors avoid its shares for the time being and consider bank shares such as Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) instead.
