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Suncorp saw its net profit after tax dip by an annualised 1.5% to $1.06bn for FY2017-2018, amid lower earnings from its banking and wealth group and higher claims in its Australian insurance unit.
According to its financial results released Thursday, the firm said it absorbed a four-fold increase in regulatory costs to $54m. Its banking and wealth profit after tax stood at $389m, or 2.8% lower from a year before.
“Deposit growth and lending growth were both strong, with new offers, digital functionality and a simplification of our processes driving good customer experience. We continue to achieve above system growth,” said CEO and managing director Michael Cameron.
Meanwhile, Suncorp’s Australia insurance arm saw profit after tax rise 2.2% to $739m, despite a 2.7% increase in the amount of claims paid (to $5.1bn) and a 4.4% rise in operating expenses (to $1.5bn).
“Our motor and home portfolios have performed strongly with insurance premium and unit growth, and claims performance at better than industry levels. Operating expenses improved in the second half, as underwriting expenses declined and the benefits of the Business Improvement Program started to flow through. The team has also been successful in balancing the dynamics of the commercial and CTP4 books,” said Cameron.
On the same day the financial results were released, Suncorp announced it has entered into a non-binding agreement to sell its Australian life insurance business to TAL Dai-ichi Life Australia for approximately $725m. Suncorp will enter into a 20-year strategic alliance agreement with TAL to provide life insurance products through Suncorp’s Australian distribution channels, including its digital channels, contact centres and store network.
