REPORTING SEASON: Suncorp Group (SUN)
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Figure 1: Suncorp Group Ltd 12 month chart
Suncorp’s profit boosted by bank and life insurance divisions
Suncorp Group (SUN) posted a weaker than expected half-year profit of $631m for the six months ending 31 December 2014.
The result was held back by weakness in its General Insurance (GI) division due to costs associated with catastrophic events. Its Banking and Life Insurance units both bettered their respective earnings. GI accounts for ~60% of total profits.
Natural hazard claims were $470m which was driven by the worst Brisbane storm in 30 years in November 2014. This cost the Queensland based insurer $250m.
SUN will pay eligible investors a fully franked $0.38/share interim dividend on 1 April. The ex-dividend date is 18 February and is an 8.5% rise on last year despite falling short of the market’s expectations.
Looking ahead, SUN expects simplification initiatives will deliver $225m in cost savings this year and $265m in 2016. Increased market competition and low interest rates are likely to hold SUN’s full-year result back.