Suncorp posts earnings rise, ANZ-acquired bank profit falls
Make us a preferred source
Make us a preferred source on Google
The news: Suncorp reported growth in earnings in the 2024 financial year, despite acknowledging a "challenging period for our customers" amid inflationary pressures and the continuing impact of severe weather events over the 12 months to June.
The numbers: The Queensland-based insurer's net profit after tax grew 12% year-on-year to $1.197 billion while cash earnings increased 16.6% to $1.372 billion. Suncorp Bank, which was sold to ANZ on 31 July, contributed NPAT of $379 million, down 19.4% on FY23.
In the general insurance business, gross written premium (GWP) increased by 13.9%, with the company attributing the rise to unit growth and targeted price increases in response to higher costs from reinsurance, natural hazards and claims inflation. The total cost of natural hazard events was $1.235 billion over the year, $125 million below the group's allowance.
Suncorp's board declared a fully-franked final dividend of 44 cents per share, up from 27 cents last year and beating Visible Alpha estimates of 43 cents. It brings total dividends in FY24 to 78 cents per share.
The context: Suncorp said that with the sale of its bank to ANZ complete and reinsurance markets stabilising, it is now in a position to consider other covers and alternative reinsurance structures.
The group said that a year-on-year decline in Suncorp Bank's profit was driven by competitive pressures on net interest margin and increased operating expenses. NIM decreased 14 basis points to 1.82%, driven by a shift in deposit mix towards higher yielding savings products and persistent competition in lending.
Suncorp expects GWP growth in the "mid to high single digits" in FY25, boosted by increases in average written premium, offset by moderating premium rates as the reinsurance market stabilises and inflationary pressures ease slightly in some portfolios.
What they said: Suncorp CEO Steven Johnston said: "While the headline results represent strong increases on the prior year it's important to point out that the past three years have been very challenging for all insurance companies with inflation, natural hazards and a fundamental resent in global reinsurance markets."
"It's pleasing that we have navigated these challenges, and the complexity of the bank sale, and our earnings have rebounded to roughly where they were previously," he said.
The source: ASX announcement
