Suncorp Group has announced group net profit after tax (NPAT) of $582 million for the first half of the 2024 financial year, up 5.4 per cent from the prior corresponding period.
Meanwhile, cash earnings increased 13.8 per cent to $660 million, according to a statement to the ASX on Monday.
Breaking down the results, Suncorp Bank saw profits after tax decline 25 per cent to $192 million, while commercial and personal injury insurance also fell 16 per cent to stand at $194 million. However, Suncorp New Zealand saw profits grow 4.8 per cent to $87 million and the consumer portfolio saw the largest increase of 535 per cent to $203 million.
The board determined a fully franked interim ordinary dividend of 34 cents per share, representing a dividend payout ratio of 65 per cent of cash earnings.
Suncorp announced strong equity market performance, favourable market movements, and higher running yields resulted in a higher net investment income of $396 million compared with $167 million in 1H23.
It also saw double-digit growth in gross written premiums of 16.3 per cent to $6.9 billion, which it said “reflected targeted price increases to respond to reinsurance costs, elevated natural hazard experience, and ongoing inflationary pressures” alongside customer growth.
The results indicated total group operating expenses increased to $1.21 billion, reflecting growth related expenditure and inflation.
Steve Johnston, Suncorp Group chief executive, noted the impact of ongoing inflationary pressures and the impact of weather events towards a “challenging” half.
“Against this backdrop, the group has continued to work hard to support its customers while also delivering improved earnings driven by increased customer demand for our products and services and positive investment performance over the half,” Mr Johnston explained.
Last week, the Australian Competition Tribunal greenlit ANZ’s acquisition of Suncorp, quashing the Australian Competition and Consumer Commission’s (ACCC) August 2023 decision to block the takeover due to concerns it would “further entrench an oligopoly market structure” within the home loan sector.
Commenting on the decision, Suncorp Group chairman Christine McLoughlin described it as a “big win” for Queensland, and the group’s CEO, Mr Johnston, said the sale would result in Suncorp becoming a dedicated trans-Tasman insurance company.
“Our ability to meet the rapidly evolving needs of insurance customers and address increasingly complex challenges such as climate change and affordability will be significantly strengthened through dedicated investment as a pureplay insurance company,” he explained.
Subject to regulatory approvals, the transaction is expected to be complete around the middle of calendar year 2024. The group’s expected net proceeds of $4.1 billion from the sale remain materially unchanged while it expects to incur $70 million post-tax of bank separation costs in 2H24.
“We look forward to continuing to engage constructively with the Queensland government and federal Treasurer on the remaining approvals and remain fully committed to Suncorp Bank while the process continues,” Mr Johnston said.
