Wealth management fuels Ameriprise results

  • Article by: JENNIFER BJORHUS , Star Tribune
  • Updated: January 30, 2013 - 5:38 PM
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The Ameriprise Operations Center at 1001 Third Ave. South, Minneapolis.

Photo: Glen Stubbe, Star Tribune

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Profits at Ameriprise Financial Inc. shot up 19 percent in the fourth quarter, fueled by strong results in its advice and wealth-management business and recent gains in the stock market.

The investment services company, which just launched a new ad campaign featuring actor Tommy Lee Jones, reported operating earnings of $367 million, or $1.71 per share, up from $308 million, or $1.31 per share, a year ago.

It was the best showing in several quarters for Minneapolis-based Ameriprise, whose shares have been climbing higher and higher since last spring. Ameriprise released results after markets closed Wednesday. Shares, which closed at $66.86, were up in after-hours trading.

The company, which has $2 billion in deployable capital, declared a quarterly cash dividend of 45 cents per common share payable Feb. 22.

"We reported a record high for assets under management and administration driven by strong client net inflows into fee-based accounts and equity market appreciation," chairman and CEO Jim Cracchiolo said in the company's news release.

The company's two central business lines -- advice and wealth management, and asset management -- both saw double-digit growth in pretax operating income.

Advice and wealth management business operating earnings jumped 43 percent from a year ago as retail clients invested more with the company. The increase came despite a negative impact from changing the deposit-taking bank it ran for clients, Ameriprise Bank, into a national trust institution, the company said.

Operating earnings in the firm's asset-management business grew 11 percent from a year ago despite even heavier outflows from its important Columbia Management business.

Investors have been pulling more money out of Columbia Management than they've been putting in for years. While those outflows, at $4.6 billion in the fourth quarter, were half what they were a year ago, they were up significantly from the third quarter.

Credit Suisse analyst Tom Gallagher downgraded Ameriprise earlier this month to neutral from outperform, citing Columbia's outflows and saying they aren't reflected in the company's stock.

Jennifer Bjorhus • 612-673-4683

AMERIPRISE FINANCIAL INC.

(AMP) Diversified financial services company providing comprehensive financial planning needs of the mass affluent and affluent.

4th quarter FY2012, 12/31

2012 2011 % chg. Revenue $2,684.0 $2,593.0 +3.5 Cont. ops. 331.0 268.0 +23.5 Disc. ops. 1.0 13.0 -92.3 Income 389.0 236.0 +64.8 Earn/share 1.81 1.01 +79.2

12 months

Revenue $10,259.0 $10,239.0 +0.2 Cont. ops. 903.0 1,070.0 -15.6 Disc. ops. -2.0 -60.0 -- Income 1,029.0 1,116.0 -7.8 Earn/share 4.62 4.53 +2.0

Figures in millions except for earnings per share.

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