SUN profits down, bank profit up
(26 August 2008 – Australia) Banking and insurance company, Suncorp, has announced a fall in full year profits to $556 million despite a rise in profit for the banking division of the company.
The large drop, a 47.7 percent fall in full-year net profit was attributed to turbulence in global financial markets and claims from bad weather. Suncorp warned earlier this month that profits would halve.
Despite the drop in overall performance, profit before tax for the banking operations increased by 11.2 percent to $633 million. Suncorp said that the result was at the top end of guidance and featured margin stabilisation in the second half, as well as maintenance of disciplined credit practices.
General insurance profit before tax was $307 million, significantly down on last year’s figure of $835 million after severe weather events and volatile investment markets impacted the bottom line.
Underlying profit was $136 million for the wealth management business, down 9.3 percent on last years result.
Chairman John Story said that, despite the headline result, Suncorp’s underlying business performance had been solid throughout one of the most challenging years in recent history for financial services companies.
John Mulcahy, Suncorp chief executive officer said that like most Australian financial services companies, Suncorp’s results for the last financial year were directly and indirectly impacted by external events.
However, underlying business performance and momentum was maintained and the group is well placed to ride out any further deterioration in the market, as well as take advantage of any improvement in the industry cycle, he added
Mulcahy also said the Promina integration remained on track with the group expecting to achieve its upgraded annualised synergy estimate by June 2010.
The business has made good progress on its integration program, as evidenced by the fact that the synergy realisation run rate is ahead of target, while integration costs remain well managed, he said.
Despite the drop in overall performance, profit before tax for the banking operations increased by 11.2 percent to $633 million. Suncorp said that the result was at the top end of guidance and featured margin stabilisation in the second half, as well as maintenance of disciplined credit practices.
General insurance profit before tax was $307 million, significantly down on last year’s figure of $835 million after severe weather events and volatile investment markets impacted the bottom line.
Underlying profit was $136 million for the wealth management business, down 9.3 percent on last years result.
Chairman John Story said that, despite the headline result, Suncorp’s underlying business performance had been solid throughout one of the most challenging years in recent history for financial services companies.
John Mulcahy, Suncorp chief executive officer said that like most Australian financial services companies, Suncorp’s results for the last financial year were directly and indirectly impacted by external events.
However, underlying business performance and momentum was maintained and the group is well placed to ride out any further deterioration in the market, as well as take advantage of any improvement in the industry cycle, he added
Mulcahy also said the Promina integration remained on track with the group expecting to achieve its upgraded annualised synergy estimate by June 2010.
The business has made good progress on its integration program, as evidenced by the fact that the synergy realisation run rate is ahead of target, while integration costs remain well managed, he said.
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