The interim financial report from Suncorp all went according to the script on Tuesday.
The previously telegraphed negative impact from a spate of natural disasters took the predictable toll on December half earnings for Brisbane-based insurer and regional bank – they fell.
So much so that Suncorp cut its interim dividend in the wake of the 29.1% fall in first-half cash profit to $361 million.
Despite that negative, the shares rose more than 5% to $12.03.
The company owns insurance businesses such as GIO, AAMI and Apia and confirmed the damage done to first half earnings from the spate of natural hazard claims costs for the six months to December which were $205 million higher than expected at $695 million.
Suncorp had warned in October that wild weather was causing far more claims than it had anticipated while volatile financial markets didn’t make life any easier, hitting investment returns.
But lower claim costs than forecast (people didn’t drive or travel as often as they did pre-pandemic) and the release of a provision relating to COVID-19 helped the bottom line.
Group net profit after tax was down 20.8% to $388 million and cash earnings of $361 million were impacted by 19 separate weather events and more than 50,000 natural hazard claims during the half.
That saw earnings in insurance slide 55.8% to $114 million.
Profit in the Bank increased to $200 million (from $195 million previously) and accounted for 55% of Group cash earnings for the half.
Suncorp said bank lending grew by 2.7% in the half, but like rival banks, its net interest margin was squeezed, falling 12% to 1.97%.
The bank benefited from very low levels of borrower stress, with past due loans at their lowest level since 2012, despite vagaries of Covid.
Interim ordinary dividend of 23 cents per share was 80% of profit, down 3 cents a share and at the top end of the 60% to 80% payout range. That was an indication of how the company strained itself to keep shareholders happy.
In Tuesday’s statement, CEO, Steve Johnston said: “While we have been challenged by the La Niña climate pattern and the operational impacts of COVID-19, we continue to deliver against our strategic priorities and have good momentum as we move into the second half of FY22.
“I am particularly proud of how we have supported our customers and communities during this time. Despite the many challenges of COVID-19 our teams have mobilised quickly to get our customers back on their feet.
“Across all three businesses we are growing, becoming more efficient and improving how we serve our customers.”
