AMP Declares AUD 2.0575 Dividend with 20% Franking for Q1 2025

AMP’s Dividend Update: Clarity on Franking Rate

AMP Limited has provided an update to its previous dividend announcement, confirming the franking rate attached to its upcoming ordinary dividend distribution. The dividend, amounting to AUD 2.0575 per security, will be paid on March 17, 2025, with a record date of March 7, 2025. This update removes any ambiguity around the tax components of the dividend, an important consideration for income-focused investors.

Partial Franking and Tax Implications

The dividend is partially franked at 20%, with a franking credit rate of 30%, meaning AUD 0.4115 per security is franked. The remaining 80% of the dividend is unfranked but includes a conduit foreign income amount of AUD 1.646 per security. This structure reflects AMP’s approach to balancing shareholder returns with tax efficiency, offering investors a blend of franked and unfranked income streams.

Distribution Details and Payment Mechanics

The distribution relates to the quarter ending March 16, 2025, covering a 91-day period. The dividend rate is influenced by the 3-month bank bill swap rate plus a margin of 4.5%, adjusted by a franking factor. This results in an annualised distribution rate of 8.2525%. Importantly, no external approvals such as security holder or court approval are required ahead of the payment date, streamlining the process for AMP and its investors.

Context Within AMP’s Capital Notes Framework

This dividend relates specifically to AMP Capital Notes 2, a perpetual, non-cumulative capital note with a margin linked to the BBSW rate. The terms allow AMP discretion over distributions, subject to no payment conditions existing on the payment date. This update reaffirms AMP’s commitment to maintaining consistent distributions under the terms of these notes, which are a key component of its capital structure.

Investor Takeaways and Forward Look

For investors, the confirmation of the franking rate provides clarity on the after-tax yield of the dividend, a critical factor in portfolio income planning. While the partial franking means some tax efficiency, the significant unfranked portion tied to foreign income may influence investor appetite depending on individual tax circumstances. Looking ahead, market watchers will be keen to see if AMP maintains this distribution pattern amid evolving economic conditions and interest rate environments.