Suncorp's Fiscal 2014 Profit Beats Expectations and Includes Another Special Dividend

Suncorp Group's adjusted cash profit for fiscal 2014 of AUD 1,304 million exceeded our AUD 1,230 million forecast because of a stronger-than-expected performance in general insurance and banking. Otherwise, there are no major surprises in the 2014 reported profit of AUD 730 million (up 48% on fiscal 2013), with 2014 earnings including a previously flagged AUD 496 million non-cash write-down of the Suncorp life division intangible assets, following a belated recognition of worse-than-expected future claims and lapse assumptions. The life division reported cash earnings of AUD 84 million, down 30% on fiscal 2013. The final fully franked dividend of AUD 0.40 per share and a AUD 0.30 special dividend take total dividends to an attractive AUD 1.05 per share for the year, up significantly on the AUD 0.75 paid for fiscal 2013. Despite the special dividend, Suncorp maintains a strong capital position with in excess of AUD 831 million of additional capital held above operational targets. General insurance continues to improve, with a AUD 1,010 million profit, up 14% on 2013. The impressive 14.3% underlying insurance margin is in line with previous guidance. The previously troubled banking division reported a much-improved profit of AUD 228 million.