10-QPeriod: Q2 FY2021

AMERIPRISE FINANCIAL INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 9, 2021For Securities:AMP

Summary

Ameriprise Financial, Inc. reported a strong second quarter for 2021, demonstrating significant year-over-year improvement in its financial performance. Total net revenues grew by 26% to $3.4 billion, driven by robust increases in both Management and financial advice fees (up 32%) and Distribution fees (up 21%). This revenue growth, coupled with a substantial decrease in total expenses by 17%, led to a substantial swing from a net loss of $539 million in the prior year's second quarter to a net income of $591 million in the current quarter. The company's Advice & Wealth Management segment saw a significant boost, with adjusted operating earnings up 56% due to higher average wrap account assets driven by market appreciation and net inflows, alongside improved transactional activity. The Asset Management segment also performed exceptionally well, with adjusted operating earnings increasing by 79%, benefiting from higher average assets under management and disciplined expense management. While the Retirement & Protection Solutions segment experienced a slight decline in adjusted operating earnings (down 18%), this was primarily attributed to a shift in business mix and a return to more normalized claims experience after pandemic-related impacts in the prior year. Looking ahead, Ameriprise Financial continues to execute on its strategic initiatives, including the pending acquisition of BMO Financial Group's European asset management business. The company remains focused on driving shareholder value through continued growth in its core businesses and prudent capital management.

Financial Highlights

31 data points
Beta

Revenue

$3.40B

Net Income

$356.00M

10.5% Net Margin

EPS (Diluted)

$2.94

Total Assets

$171.70B

Cash & Equivalents

$8.83B

Free Cash Flow

$1.93B

Financial Statements
Beta
Revenue$3.40B
Operating Expenses$2.97B
Net Income$356.00M
EPS (Basic)$3.01
EPS (Diluted)$2.94
Shares Outstanding (Basic)118.40M
Shares Outstanding (Diluted)121.20M

Key Highlights

  • 1Net income for the second quarter of 2021 was $591 million, a significant turnaround from a net loss of $539 million in the same period last year.
  • 2Total net revenues increased by 26% year-over-year to $3.42 billion, driven by strong performance in Management and financial advice fees (+32%) and Distribution fees (+21%).
  • 3Total expenses decreased by 17% year-over-year to $2.70 billion, contributing to the substantial improvement in profitability.
  • 4The Advice & Wealth Management segment's adjusted operating earnings grew by 56% to $423 million, fueled by higher wrap account assets and net inflows.
  • 5Asset Management segment's adjusted operating earnings surged by 79% to $253 million, driven by increased assets under management and effective cost control.
  • 6Total Assets Under Management and Administration (AUM/AUA) grew by 28% to $1.21 trillion as of June 30, 2021, indicating strong client asset growth.
  • 7The company continues to return capital to shareholders, repurchasing $1.76 million shares for approximately $450 million during the quarter.

Frequently Asked Questions

The primary drivers were a substantial increase in total net revenues, up 26% year-over-year to $3.42 billion, fueled by growth in management and financial advice fees and distribution fees, combined with a 17% reduction in total expenses. This led to a strong swing from a net loss in Q2 2020 to a net profit in Q2 2021.

The Advice & Wealth Management segment showed robust growth with a 56% increase in adjusted operating earnings, driven by higher wrap account assets and net inflows. The Asset Management segment also performed very strongly, with a 79% increase in adjusted operating earnings due to market appreciation and disciplined expense management. The Retirement & Protection Solutions segment saw a slight decrease in adjusted operating earnings, primarily due to a shift in business mix and a return to normalized claims experience.

Ameriprise Financial is proceeding with the acquisition of BMO Financial Group's European asset management business, expected to close in Q4 2021, which will add significant AUM. The company continues to manage its capital effectively, repurchasing shares and returning capital to shareholders, while maintaining a strong liquidity position.

Total AUM/AUA increased by a significant 28% to $1.21 trillion as of June 30, 2021, compared to the previous year. This growth was driven by increases in both Advice & Wealth Management AUM and Asset Management AUM, reflecting market appreciation and positive net flows.