Suncorp in tough year result
(26 August 2009 – Australia) Banking and insurance group, Suncorp, has announced a 40 percent drop in net profits for the year to the end of June 2009.
Profit was A$348 million for the year, falling 40 percent, with banking provisions, claims costs and acquisition expenses all making for a tough year at the group.
Profit before tax in the group’s banking division fell by a significant 82 percent over the year to A$117 million, while both the general insurance and life businesses both managed an increase in profits before acquisition items.
Suncorp said that its banking division performed solidly on an underlying profit basis, supported by a continuing focus on cost control, but this was offset by a significant increase in provisions for bad and doubtful debts.
Lending growth slowed over the course of the year, consistent with the slowing domestic economy and the bank’s stated objective of running off non-core portfolios.
Profit before tax, bad debts and one-off items was A$781 million, up from the 2008 mark of A$668 million. Contribution before tax, however, fell to $117 million from the 2008 level of A$633 million) due to the massive jump in provisions.
Full year impairment charges in the banking division, while within guidance, reached A$710 million, a tenfold increase on the 2008 level of A$71 million, representing 128 basis points of gross loans advances and other receivables.
The 2009 financial year coincided with the most volatile period in Australian financial services history and, although underlying performance remained solid, each of Suncorp’s businesses was impacted by unfavourable operating environments, Suncorp chairman John Story said.
Profit before tax in the group’s banking division fell by a significant 82 percent over the year to A$117 million, while both the general insurance and life businesses both managed an increase in profits before acquisition items.
Suncorp said that its banking division performed solidly on an underlying profit basis, supported by a continuing focus on cost control, but this was offset by a significant increase in provisions for bad and doubtful debts.
Lending growth slowed over the course of the year, consistent with the slowing domestic economy and the bank’s stated objective of running off non-core portfolios.
Profit before tax, bad debts and one-off items was A$781 million, up from the 2008 mark of A$668 million. Contribution before tax, however, fell to $117 million from the 2008 level of A$633 million) due to the massive jump in provisions.
Full year impairment charges in the banking division, while within guidance, reached A$710 million, a tenfold increase on the 2008 level of A$71 million, representing 128 basis points of gross loans advances and other receivables.
The 2009 financial year coincided with the most volatile period in Australian financial services history and, although underlying performance remained solid, each of Suncorp’s businesses was impacted by unfavourable operating environments, Suncorp chairman John Story said.
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