(4 September 2006 – Australia) Suncorp group announced a record profit for the year ending 30 June, topping A$1 billion for the first time in company’s history.Pre-tax profit reached A$1.04 billion which represents a 10.1 percent increase on last year’s figure.
Suncorp Bank profit was up 11.5 percent, coming in at A$506 million. The company said this was driven by growth in home and business lending, continuing good credit quality and a strong operating cost performance.
“The 2006 financial year was a difficult one for all financial services organisations, with increasing competition, margin pressures and slowing credit formation in particular sectors,” said Suncorp’s chief executive officer, John Mulcahy.
Mulcahy said that the company was able to respond to these challenges in a measured and disciplined way and was even able to launch new products and initiatives.
While he believes the current economic conditions remain strong, Mulcahy said that future interest rate increases would act to erode growth in retail mortgage lending and that competition in the financial services sector would intensify as economic growth eased off.
“Given our strong business fundamentals, and assuming there are no major changes in market conditions, we would expect to grow underlying profit before tax and bad debts in our banking business by 10 percent in the coming financial year,” Mulcahy added.
Suncorp is considering returning surplus equity to its shareholders through a share buyback in December 2006 quarter. The company has also flagged an ordinary dividend payout of 50 cents per share.