Suncorp Group (SUN) H2 2024 earnings summary

Executive summary

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

• Completed the sale of the bank to ANZ on 31 July 2024, with net proceeds of ~$4.1 billion expected to be returned to shareholders, primarily via capital return and share consolidation in early 2025.

• Strong performance in General Insurance, with GWP up 13.9% to $14.1 billion, and improved underlying insurance trading and services ratios.

• Strategic focus on platform modernization, digital transformation, and disciplined capital management.

• Natural hazard costs were $1,235 million, $125 million below allowance, despite managing 13 major weather events.

Financial highlights

• Net investment returns increased to $661 million from $451 million year-over-year, with average underlying yield on tech reserves in Australia at 5.3% and shareholder funds at 7.2%.

• Dividend per share for FY24 is 78 cents, with a payout ratio of 72% of cash earnings.

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

• CET1 capital held at Group is $203 million, with strong capital ratios maintained.

• Total Group operating expenses rose 8.5% to $2.5 billion, reflecting growth, inflation, and technology investments.

Outlook and guidance

• FY25 GWP growth expected in the mid to high single digits, with underlying ITR/UITR targeted at the top 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.

• Reserve releases in CTP expected at 0.4% of group net insurance revenue and to be lower in FY25.

• Commitment to sustainable ROE above the through-the-cycle cost of equity.