Suncorp's wealth management business will post a lower full-year result than previously expected, due to market downturn.
Suncorp has warned investors its wealth management division will report a decrease in full-year results due to the downturn in investment markets and an increase in discount rates.
The company has begun a review of the division, with the aim of simplifying the business model, including all processes and products.
"I'm confident that the changes we are making will position that business to ride out the ongoing challenging external environment and allow it to benefit from any upswing in the industry cycle," Suncorp chief executive John Mulcahy said.
The company now expects the division to report an underlying profit for 2007/08 in the range of $130 - $135 million, a decrease from 13 to 10 per cent, compared to the pro forma after tax result of $150 million the year before.
The new forecast is based on preliminary unaudited results.
"I find this a disappointing result." Mulcahy said last Friday. "[The wealth management result] is the only real variation from our top line guidance.
Overall, the group expects to post a net profit after tax between $525 million and $550 million for 2007/08. This means a reduction by almost half of the result achieved in 2006/07, when the group reported a figure of $1,064 million.
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