Suncorp profits down by a half
(5 August 2008 – Australia) Suncorp has announced its profit for the year to June will be about a half of the last year’s figure, citing the credit crisis, volatile investment markets and severe weather events as the main drags on the Group’s performance.
Suncorp said it expects net profit for the year to June to be between A$525m and A$550m, or about a half of the A$1.06b figure reported last year. The expectations are south of A$580 to A$600m predicted by most analysts.
Suncorp Group consists of a general insurance, wealth management and banking businesses.
Despite weaker Group profit, the banking business is expected to remain on track, with profits expected to grow by about 12 percent on the previous year.
Bad debts are expected to increase but the bank claims it has minimal exposure to unsecured lending and predicts its impairment losses will be less than those for the major banks.
The downturn in the investment markets delivered the biggest hit to the Group’s profits, wiping off substantial value from the general insurance shareholders fund and impacting on wealth management earnings.
Earnings from Suncorp’s wealth management division are expected to come in at A$135, a significant decline from the last year’s figure of A$150m.
The Group’s general insurance business also suffered from more severe weather events than initially predicted, resulting in an additional A$215m in costs needing to be set aside.
The Group’s chief executive John Mulcahy said he remained positive about future performance saying that all of the Group’s businesses are in a good shape and that most Australian financial services companies have been affected by the current economic conditions.
Suncorp Group consists of a general insurance, wealth management and banking businesses.
Despite weaker Group profit, the banking business is expected to remain on track, with profits expected to grow by about 12 percent on the previous year.
Bad debts are expected to increase but the bank claims it has minimal exposure to unsecured lending and predicts its impairment losses will be less than those for the major banks.
The downturn in the investment markets delivered the biggest hit to the Group’s profits, wiping off substantial value from the general insurance shareholders fund and impacting on wealth management earnings.
Earnings from Suncorp’s wealth management division are expected to come in at A$135, a significant decline from the last year’s figure of A$150m.
The Group’s general insurance business also suffered from more severe weather events than initially predicted, resulting in an additional A$215m in costs needing to be set aside.
The Group’s chief executive John Mulcahy said he remained positive about future performance saying that all of the Group’s businesses are in a good shape and that most Australian financial services companies have been affected by the current economic conditions.
Subscribe