Suncorp shares rise despite earnings miss
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More news: Suncorp shares rose 3.5% by 11:58pm AEDT following a lift in group earnings but a profit fall for its banking arm.
What they said: UBS analysts noted the company’s results were a “significant earnings miss overall”. They said while there was a small beat in expectations within its Australian insurance business it was let down by weak earnings in its New Zealand and banking businesses.
“Market likely to look through the bank miss as these earnings are likely [to be] sold to ANZ mid-year,” they said.
Suncorp Bank posts 25% profit drop amid ANZ takeover
The news: Suncorp has posted a lift in group earnings as premiums increased but its banking arm experienced a 25% profit fall during the first half of the financial year.
The numbers: Suncorp's group NPAT rose 5.4% to $582 million during the six months to December 2023 compared to the previous corresponding period. Cash earnings also increased, growing 13.8% to $660 million, driven by higher investment returns and pricing.
The group's gross written premium was up 16% to $16.9 billion, buoyed by price rises across the industry. Elsewhere, the insurance group said the total cost of natural hazard events was $568 million — $112 million below the company's allowance in the half.
However, Suncorp Bank, which is on the verge of a $4.9 billion takeover from ANZ after the Australia Competition Tribunal authorised the sale last week, saw profit after tax sink 25% to $192 million.
Suncorp's board declared an interim dividend of 34 cents per share, up from 33 cents per share a year ago.
The context: Suncorp said its banking arm's profits were hit by "competitive pressures impacting margin" as its net interest margin decreased 23 basis points.
Meanwhile, the group's proposed sale of Suncorp Bank to ANZ still requires approval from the Queensland government and federal Treasurer Jim Chalmers before completing.
The source: ASX announcement
