Suncorp shakes off rejection, cracks $1 billion in profit as lending, investments soar
Suncorp has dusted itself off from the rejection of its banking division merger with ANZ to record a $1.15 billion profit for the year to June.
Suncorp CEO Steve Johnston is seen at the start of the group's annual general meeting in Brisbane. (AAP Image/Dan Peled)
The result was a 68 per cent increase and came as the Commonwealth Bank announced a $10.1 billion profit and a $2.40 a share final dividend.
Suncorp reported home lending growth was up 9 per cent and its investment market returns of $724 million, based primarily on a significant turnaround in the mark-to-market losses of the previous year.
Investors would receive a full year dividend of 60 cents a share, an increase of 50 per cent on 2022.
A black mark on the otherwise strong result was the impact of weather events after a third consecutive La Nina weather pattern which created 15 separate events and 130,000 natural hazard claims.
Suncorp also said the costs involved in its banking merger plans could grow by another $100 million, following the scheme’s rejection by the ACCC.
Chief executive Steve Johnston said it was a strong set of results and demonstrated the progress made in executing its strategic plan.
He said it was pleasing considering the challenges presented in 2023.
“While Suncorp remains well protected through its comprehensive reinsurance program, over the last few years floods, fires and other natural disasters have resulted in a continued reassessment of risk by our reinsurance partners,” Johnston said.
“This combined with broader inflationary pressures across the economy continues to impact the cost of reinsurance across the industry and is a major contributor to the rising costs of everyone’s insurance premiums, particularly when household budgets are under pressure.”
The Australian insurance business generated $755 million in after-tax profit, an increase of 333 per cent. Suncorp Bank reported a net profit of $470 million, an increase of 27 per cent and benefited by increased home lending of $4.6 billion. Business lending was up 6 per cent and deposits increased almost 7 per cent to $51 billion.
The Commonwealth Bank’s result included a loan impairment expense increase of $1.4 billion related to cost of living pressures.
The bank’s chief executive, Matt Comyn, said there were downside risks building in the Australian economy.
“We are seeing consumer demand moderate and economic growth slow and we are closely monitoring the impact of reduced discretionary spend, particularly on our small and medium sized business customers,” he said.
