Suncorp Group (SUN) H2 2024 earnings summary

Executive summary

• Delivered FY24 cash earnings of AUD 1,372 million and NPAT of AUD 1,197 million, with underlying GI profit after tax up 29% year-over-year to AUD 1,104 million.

• Achieved strong growth and margin improvement, driven by unit growth, pricing, and positive investment returns.

• Completed the sale of the bank, with net proceeds of around AUD 4.1 billion expected to be returned to shareholders, subject to business needs and approvals.

• Declared a final fully franked dividend of AUD 0.44 per share, representing a 72% payout ratio of cash earnings.

• Maintained a strong balance sheet with AUD 203 million CET1 capital held at Group level.

Financial highlights

• Net profit after tax was AUD 1,197 million, up 16.6% year-over-year; cash earnings reached AUD 1,372 million, up 11.8%.

• Underlying ITR improved to 11.1% for the full year and 12% in the second half, reflecting premium increases and margin recovery.

• Investment income rose significantly due to higher yields and strong equity markets; average yield on tech reserves in Australia was 5.3%.

• Group operating expenses increased by 8.5%, mainly from growth investments and higher bank expenses.

• GI operating expense ratio improved by 80 bps to 13.9%.

Outlook and guidance

• GWP growth expected in the mid to high single digits for FY25, with underlying ITR targeted at the top end of the 10%-12% range.

• Investment income anticipated to moderate as interest rate expectations adjust.

• Expense ratios expected to remain broadly flat, with continued investment in strategic initiatives.

• Sustainable ROE targeted above the through-the-cycle cost of equity.

• Reinsurance market stabilising, with improved conditions expected in FY25.