S&P boosts Ameriprise outlook to 'stable'

NEW YORK

Standard & Poor's Ratings Services on Thursday revised its outlook on the credit ratings of Ameriprise Financial Inc. to 'stable' from 'negative,' citing recent earnings improvement at the investment manager and financial advisory company.

The outlook revision also applies to Ameriprise's insurance subsidiaries, RiverSource Life Insurance Co. and RiverSource Life Insurance Co. of New York.

S&P also affirmed its 'A' counterparty credit rating on Ameriprise and its 'AA-' counterparty credit and financial strength ratings on the insurance subsidiaries. The ratings are investment-grade.

S&P credit analyst Ovadiah Jacob said Ameriprise's pretax 2009 earnings rebounded from lows in 2008, and are expected to fully recover this year. Last year's earnings were down 9 percent off highs in 2007, he said.

On Wednesday, Minneapolis-based Ameriprise reported its second-quarter profit nearly tripled on surging asset growth, driven in part by the past year's stock market gains as well as the company's recent acquisition of Columbia Management.

Ameriprise agreed last September to acquire Columbia, Bank of America Corp.'s long-term asset management business, for up to $1.2 billion.

"This acquisition should materially enhance the scale and stability of the asset management business," Jacob said.

Shares of Ameriprise surged $3.78, or 9.9 percent, to $42.06 in morning trading.