The Suncorp Group delivered a net profit after tax attributable to owners of the company of $250 million for the half year, plunging by 45 per cent from $452 million in 1H18.
Net assets of the Suncorp Group decreased to $13.6 billion from $13.9 billion in the prior half.
The decrease in net assets of $349 million primarily arises from the payment of the 2018 final and interim dividend, partially offset by the total comprehensive income for the half-year, Suncorp said.
Total revenue came to $7.5 billion, increasing by 4 cent from the prior corresponding period (pcp).
Profit after tax from continuing operations came to $389 million, a 5 per cent slip from the pcp.
The firm’s cash earnings came to $413 million, a fall of 12.5 per cent from the pcp.
Dividends were posted at 26 cents per share for the half, a drop of around 33 per cent.
In its banking and wealth segment, the group saw profits from ongoing operating functions in banking and wealth decline by 11 per cent, excluding the contribution from the now being sold Australian Life business.
The segment delivered a NPAT from continuing operations of $183 million for the half year, a drop of 4 per cent from the pcp.
It also saw its net interest income decrease by 2.2 per cent to $585 million from the pcp.
Funds under administration were impacted over the half by elevated outflows and a downturn in international investment markets the bank said, as it slipped to $6 billion from $6.4 billion.
Wealth profit attributed to shareholders of $1 million was an improvement from a loss of $6 million in 1H18, due to the completion of the Super Simplification Program last year, the group said, with it being partially offset by increased industry-wide regulatory costs over the half.
Meanwhile, banking gained a profit after tax of $182 million, a drop of 4.7 per cent from the pcp.
Suncorp expects regulatory costs to remain elevated over the medium-term as the wealth business continues the implementation of its regulatory change program, which includes responding to the royal commission inquiries, delivery of ASIC requirements in its wealth segment and additional training and compliance costs associated with call centres.
The bank originally assumed its regulatory spend would be $90 million for the full year, but has now upgraded its prediction to $140 million, a 62 per cent increase.
“The banking and wealth result was broadly flat compared to the prior period, reflecting lower impairment losses and expenses, Suncorp said, offset by subdued top-line growth and funding cost pressures,” Suncorp noted.
Suncorp’s $725 million sale of its Australian Life insurance business, Suncorp Life & Superannuation, to TAL Dai-ichi Life Australia is expected to be complete by the end of the month, subject to conditions and regulatory approvals both in Australia and Japan.
Once the transaction is complete, the two companies will enter into what they call a 20-year strategic alliance.
The Insurance segment on the other hand, saw its NPAT just about split in half, dropping by 51 per cent to $135 million for the half year.
The New Zealand branch gained 82 per cent in profit, seeing a NPAT of $111 million for the half.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].