REPORTING SEASON: Suncorp Group (SUN)

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Figure 1: Suncorp Group 12 month chart

 

Suncorp Group (SUN) meets expectations despite more natural disasters

– Suncorp Group reported that net profit after tax (NPAT) met consensus expectations, rising by 55.2% to $1,133 million compared to $730 million for the same period last year.

– The group reported a strong performance in the banking business which was driven by improvements in lending growth and the Net Interest Margin (NIM). Bank lending grew by 3.9% while impairment losses were down substantially, falling by 53.2%. Non-performing loans were down by 20%. Bank NPAT rose significantly to $354 million compared to $228 million for the same period last year with the NIM rising to 1.85% from 1.72% a year ago.

– The General Insurance business reported a 25% decline in NPAT to $756 million from $1,010 million a year earlier. The result reflected the worst year for natural disasters in SUN’s history totalling $1,068 million which was $473 million above the full year allowance. This included the net impact of around $650 million from five major weather events in Queensland and New South Wales. Gross Written Premium (GWP) was flat at $8,872 million. Personal Insurance GWP reduced by 2.5%; Commercial Insurance GWP grew by 2.2%, while Compulsory Third Party (CTP) GWP grew 5.9%

– Suncorp Life reported a NPAT of $125 million, an increase of 35.9%. Underlying profit was $113 million, up 34.5% which benefited from cost controls which helped operating expenses fall by 7.3%.

– SUN declared a fully franked, final dividend payment for the period of 38 cents per ordinary share and a 12 cent special dividend per fully paid ordinary share. The record date for the payments is Thursday August 13, 2015 with a payment date of Tuesday September 22, 2015.

 

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Tom Piotrowski, Market Analyst,