Why is AMP buying back shares?

AMP has snapped up more than 32 million of its own shares over the last week.

| More on:
A businessman holding a butterfly net looks around hoping to snare a good ASX share investment

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • AMP has been buying back its own shares on-market over the last week or so
  • The buyback is one part of a $1.1 billion capital return announced by the company last month
  • Its to be worth $350 million and will run until June 2023

Eagle-eyed market watchers have likely noticed an interesting occurrence with AMP Ltd (ASX: AMP) shares lately. The ASX financial company has been buying back its own stock on market.

As of this morning, AMP had secured more than 32 million of its shares since its buyback program began last week.

The move has left many onlookers scratching their heads, perhaps wondering about the financial services provider's end game. But wonder no more.

Keep reading as we dive into all the details on the company's current on-market buy-back.

Right now, the AMP share price is trading at $1.185, 1.72% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has lifted 0.03% this morning.

Why is AMP buying back its shares?

AMP is buying back its shares as part of a $1.1 billion capital return announced last month.

The current share buyback is just one portion of the planned return. It's ultimately expected to be worth $350 million and will run until June 2023.

The move will help bolster the value of the company's remaining shares by reducing the number of outstanding shares on issue. Thus, its future profits will be spread across fewer shares, increasing its earnings per share (EPS).

The capital return will also work to reduce the company's surplus capital, which sat $1.5 billion above its board's requirements at the end of June.

AMP plans to return another $750 million to shareholders this financial year. It expects to do so through a combination of capital return, special dividend, and further buybacks.

The company will also allocate around $400 million of liquidity to pay down its debts and de-leverage its balance sheet.

AMP's underlying profit fell 24.5% last half, slipping to $117 million. The company hasn't declared a dividend since 2019.

The AMP share price is currently trading within 3% of its 52-week high of $1.22, reached in May.

Should you invest $1,000 in City Chic Collective Limited right now?

Before you buy City Chic Collective Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and City Chic Collective Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

Delighted adult man, working on a company slogan, on his laptop.
Financial Shares

Macquarie tips 28% upside for this ASX financial stock

This stock has a lot of potential.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Earnings Results

Why is the QBE share price racing ahead of the benchmark on Friday?

Investors are bidding up QBE shares today. But why?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Macquarie share price leaps higher on rising full-year profits

Macquarie reported its full year FY 2025 results today. Here's why ASX investors are reacting enthusiastically.

Read more »

Woman and man calculating a dividend yield.
Financial Shares

Here's what Macquarie thinks QBE shares are worth after reviewing 18 global insurers

Macquarie has just issued a new note on QBE shares.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Financial Shares

Should I buy the dip on Macquarie shares now?

Atop their reliable passive income, Macquarie shares offer growth potential, according to this leading expert.

Read more »

Nervous customer in discussions at a bank.
Financial Shares

Guess which ASX 200 bank stock just crashed 19% on shock news

Investors have been hitting the sell button in a panic this afternoon.

Read more »

Two CEOs shaking hands on a deal.
Financial Shares

This ASX 300 stock is jumping on surprise merger news

This stock could be having a very big makeover.

Read more »

Man smiling at a laptop because of a rising share price.
Financial Shares

How this quality ASX 200 stock is 'ideally placed' for years of growth

A leading expert expects more outperformance from this high-flying ASX 200 stock.

Read more »