Suncorp turns in healthy performance

Suncorp delivered a better than expected net profit today, boosted by an upturn in market conditions across its three main business areas — banking, general insurance and wealth management — for the six month period ending December 31 2003.

With an aggregate pre-tax profit of $434 million, each division improved on its performance for the corresponding period in 2002, with insurance contributing $215 million to the total, a 199 per cent improvement on the year before.

Banking and wealth management returned $177 million and $36 million respectively before tax and goodwill depreciation for the period, up 18 and 112 per cent ($150 million and $17 million) on the previous six month period for the 2002 financial year.

The group says in addition to the improved investment climate boosting the investments held within the wealth management and insurance divisions, its insurance trading result — the profit derived from the underlying insurance business excluding investment returns on shareholders funds — rose by 81 per cent to $145 million to significantly boost its performance.

The banking division also benefited from the credit quality environment remaining favourable, with non-performing loans continuing to decline and now represent 0.5 per cent of its total loan book.

“Importantly the result demonstrates that Suncorp has made significant progress in achieving its strategic goals,” group chairman John Story says.

The performance of the wealth management division is encouraging for the group as it follows the 18 per cent drop in sales it had suffered over the June half of 2003, which the group says was due to sharemarket volatility.

Sales rebounded in the December 2003 half 10 per cent to $297 million.