Suncorp Group’s (SUN) cash profit for FY17 came in lower than expected as it continued to spend on its refresh strategy. SUN posted a 3.6% rise in group NPAT to $1,075m, helped by a lift in insurance premiums & tight cost management.

Suncorp Group Limited (SUN) cash profit for the 2017 full year came in lower than expected as the banking and insurance firm continues to spend on its refresh strategy. SUN posted a group Net Profit After Tax (NPAT) increase of 3.6% to $1,075 million, helped by a lift in insurance premiums and tight cost management.

Suncorp’s Australian insurance business listed a better than expected lift in profit, helped by a 3.9% lift in Gross Written Premiums and lower costs from Natural hazards. SUN noted that recent elevated incidence claims within the income protection and trauma businesses are being carefully monitored.

General insurance claims lifted in the second half of the year group claims ratio of 71.1% up from 66.4% in the first half of the year.

Suncorp’s Life Insurance net profit after tax fell 50% to $34 million as the company works to keep underlying profits stable. Challenging market conditions has made it harder to lock in new business and renew contracts. SUN’s New Zealand insurance unit was hit by the Kaikoura earthquake and related reinsurance costs due to the quake.

Suncorp Bank NPAT fell by 4.3% year on year to $400 million, even as lending increased by 1.9% over the year. Mortgage growth was up 1.3% on the same time last year in the second half of 2017. Business loan growth was robust even with tougher lending requirements and costs involved with the “progressive rollout of the Suncorp strategy.

Operating expenses were up 2.9% on new project spend on the roll out of its refreshed strategy and ‘One Suncorp’ model.

Suncorp will pay a final dividend of $0.40 a share on 20 September 2017. This takes the full year dividend to $0.73 with the second half payout ratio of 81.9%, above the company’s guidance and expected payout ratio of 60-80% for FY18.

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