AMP may sell Virgin stake in shake-up

TROUBLED Australian financial services provider AMP is reviewing its Virgin Money joint venture as part of a revamp of its British operations. The group, which yesterday unveiled a further 1,900 job cuts in Britain, may sell its 50% stake in the business.

Last month joint venture partner Virgin Group offered to buy back the stake. AMP will not make a decision until next year. A spokesman for Virgin chief Sir Richard Branson said: 'The business is going well, we might well buy it back it off them.'

Virgin Money sells financial services including credit cards, individual savings accounts, stakeholder pensions and insurance, and is expected to break into profit next year. It is set to hit its target of issuing 200,000 credit cards this year, the spokesman said.

However, AMP chief executive Andrew Mohl indicated he was in no hurry to sell to Branson. He said he would sell 'at the right price, yes, but Richard is dreaming if he think he can buy at this point'.

AMP also revealed that it had written off more than £300m from the value of its British assets, including hefty hits on National Provident Institution, recently-acquired financial adviser Towry Law, and online adviser Ample.

Most of the job cuts, which come on top of 1,500 UK redundancies announced in June, will come at AMP's Pearl Assurance arm, where 700 positions will go with the closure of Pearl's direct sales force, and another 300 as Pearl closes its household adviser channel. The sales forces will be replaced by around 250 self-employed advisers.

AMP said the remaining 900 positions would go from support areas and from splitting its UK operations into two units - UK Life Services and UK Contemporary Financial Services

A further 100 jobs will be lost around the world in the Henderson Global Investors unit, which will reduce operations in Japan and move its Asian headquarters from Hong Kong to Singapore.

AMP shares fell 2% in Sydney after the announcement. The cuts were deeper than the market had expected.