The bank delivers full-year results for FY23
Suncorp Group has reported a group net profit after tax (NPAT) of $1.148 billion and cash earnings of $1.245 billion over the 2023 financial year, both significantly up on FY22, as the group has successfully achieved its key financial and operational targets in its three-year plan to FY23.
Suncorp Group’s FY23 results were bolstered by a 9.1% growth in its home lending, which the group said, “provided further evidence of improved broker and customer experiences,” a 10.6% gross written premium growth in the Australian general insurance business, and a 14.3% growth in its New Zealand business.
For Suncorp Bank, it posted a 27.7% increase in its profit after tax to $470 million, fuelled by strong volume growth and higher margin.
Net interest margin rose three basis points to 1.96%, backed by strategic deposit pricing, but partially offset by competitive pressures in home lending pricing and increased funding costs. Its cost-to-income rate dropped to 51.8%, from 59%, through a combination of asset growth and disciplined cost management.
Suncorp’s home lending portfolio continued its growth momentum with a 9.1% increase, or $4.6 billion, “which continues to maintain high credit quality and is conservatively positioned,” while the bank’s business lending lifted 5.9%, “predominantly driven by commercial lending growth across several industries.”
Total customer deposits saw a 6.9% increase to $51.4 billion, driven primarily by term deposits and at-call savings as customers responded to higher interest rates.
Asset quality overall remained sound. A net impairment charge of $16 million represented two basis points of gross loans and advances. The group increased its collective provision from $10 million to $190 million.
Steve Johnston (pictured above), Suncorp Group CEO, said the strong set of results demonstrated the progress the group has made over the past three years to successfully execute the strategic initiatives under the FY23 plan amidst a challenging operating environment.
“Our dedicated focus on digitising and automating, reinvigorating our leading brands, becoming more efficient and improving how we serve our customers, has helped us to deliver strong top-line growth across our businesses and improve underlying margins,” Johnston said.
Despite a strong momentum in its underlying business, Suncorp Group said its results were again impacted by natural hazard activity, including a third consecutive La Niña weather pattern, which led to 15 separate weather events and around 130,000 natural hazard claims, resulting in the group exceeding its natural hazard allowance by $97 million.
In a statement, Suncorp has declared a fully franked final ordinary dividend of 27 cents per share, with the group’s full year dividend payout ratio of 60% of cash earnings at the bottom of the target payout ratio range of 60% to 80%.
“Suncorp will support ANZ through the next step of the merger authorisation process as it relates to the sale of Suncorp Bank, being a referral of the ACCC’s recent decision not to approve the transaction to the Australian Competition Tribunal for review,” Johnston said. “We remain fully committed to supporting Suncorp Bank while the process continues.”
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