Suncorp Group (ASX: SUN) has reaffirmed its main 2022-23 guidance targets and says the big unknown, the sale of its regional bank, remains on track.
The financial group’s management told an investor day yesterday that it expected the sale of its bank to the ANZ to complete, as planned in the second half of calendar year 2023
The deal yet to be approved by regulators such as APRA and the ACCC.
While still in its hands, Suncorp said the bank was doing well.
Suncorp said its bank’s home lending growth sat at 3.3% in the first quarter of FY 2023, while its deposit growth was up 4.4% for the same time period.
The bank’s net interest margin was 1.99% in the quarter, which Suncorp said was above the 1.85% to 1.95% target range.
Suncorp’s main business is its fleet of insurance brands, centred on AAMI, GIO and APIA.
It said that so far in 2022-23 it has seen strong premium growth across its consumer, commercial and New Zealand insurance units.
It reaffirmed its underlying insurance trading ratio target of 10% to 12% for the June 30, 2023, as well as its cost-to-income ratio target of around 50%.
“The financial year-to-date premium growth across the portfolio is in line with our expectations from both a volume and average written premium perspective,” CEO Steve Johnston said.
Mr. Johnston also addressed the resolution of the business interruption dispute, and said he expected Suncorp to return the majority of the provision to shareholders in the interim results to be announced next February.
The positive update saw the company’s shares close at $12.01, up 0.6% and the highest they have been in six months.
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Like many of its tenants, shopping centre manager, Scentre Group (ASX: SCG) saw a solid rebound in top line sales in the three months to September simply because of the absence of the Covid driven lockdowns and social distancing rules this year that were in place for the same quarter last year, especially in Sydney and Melbourne and parts of NZ.
Scentre said tenants in its 42 malls saw sales of $6.4 billion of sales in the September quarter, up $2.7 billion from the Covid-hit 3rd quarter of 2021.
Since the start of this year Scentre said its tenants had achieved over $18.4 billion of sales, up 23.6% or $3.5 billion or 23.6%.
And that has helped the group’s finances and leasing activities.
Scentre said it had completed 2,464 lease deals so far this year, including 1,547 renewals and 917 new merchants. “Over 200 new brands have been introduced into the portfolio so far this year.”
And that has meant a huge improvement in rental income:
“During the 3rd quarter, $670 million in rent was collected (at 30 September 2022), representing an increase of $235 million compared to the same period last year. This represents more than 100% of billings.
“Over $1.92 billion in rent has been collected to 30 September 2022, an increase of $285 million compared to the same period last year and represents more than 100% of billings.”
And this performance saw the group reaffirm 2022 guidance for Funds From Operations “to be above 19.0 cents a security for 2022, representing more than 14.2% growth for the year.”
Distributions are expected to be up at least 5.3% at least 15.0 cents a security for the year to December.
Scentre securities ended steady at $2.90.
