Australia's Suncorp reports $654.4m profit for “very challenging” FY2020

The group’s cash earnings shrunk 32.8% from FY2019.

Australian insurance and banking firm Suncorp Group reported a net profit after tax of $654.1m (A$913m) for the fiscal year that ended on 30 June, in what the insurer described as a “very challenging year”, the group said in a bourse filing.

This was in part due to the $204.2m (A$285m) profit from the sale of Capital SMART and ACM parts business, and a $63.7m (A$89m) non-cash impairment charge relating to their core banking platform.

Although net profit is more five times higher than the $125.4m (A$175m) reported for FY2019, However, insurer cautioned against comparisons given the one-off divestments of their Australian Life business and Capital S.M.A.R.T.

The group’s cash earnings contracted 32.8% YoY to $536.7m (A$749m) as a result of reduced profits from the insurance and banking & wealth divisions.

Insurance profit after tax dropped 33.9% YoY to $275.1m ($384m), whilst banking & wealth profit shrunk 33.5% YoY to $173.4m (A$242m) compared to a year earlier.

Suncorp also increased its collective provision to $182.7m (A$255m) as of 30 June from $166.9m (A$233m) in 31 March, reflecting conservative economic assumptions and additional overlays given the ongoing uncertain outlook.

As of 31 July, 5% of the group’s home lending platform is under temporary deferral, down from 8% in 30 June, the group said in the announcement.

The group declared a final dividend of A$0.1 per share.