bad weather hits suncorp profits

Article from: AAP /

August 01, 2008 09:08am

SUNCORP Metway will leave its fiscal 2008 final dividend unchanged and has forecast flat dividend growth for fiscal 2009 after bad weather and the credit crunch almost halved its annual profit.
The bank and general insurer said it expects its preliminary, unaudited fiscal 2008 annual net profit to be between $525 million and $550 million.

Last financial year, annual net profit was a record $1.064 billion.

"Like all Australian financial services companies, our result for the 2008 financial year has been affected by external factors, including the global credit crunch, volatile equity markets and a succession of severe weather events," chief executive John Mulcahy said.

Suncorp said it decided to leave its fiscal 2008 final dividend unchanged at 55 cents, given the impact of external events.

This year's full-year dividend was anticipated to stay at $1.07, it added.

Suncorp said its banking business expected to increase its fiscal 2008 annual earnings before bad debts, tax and one-off items by about 12 per cent, at the top end of its 10 to 12 per cent guidance.

For fiscal 2009, it has forecast high single-digit growth on the same measure.

"While it likely the level of non-performing loans will continue to increase in 2008/09, it is anticipated the impairment loss expense will remain within the historical range compared to the major bank peer group," Suncorp said.

The Sydney-based firm, which last year acquired general insurer Promina Group, said it expected the bank's contribution to its fiscal 2008 profit before bad debts, tax and one-off items to be between $630 million and $635 million.

Full year bad debts are expected between $70 million and $75 million.

http://www.news.com.au/business/story/0,27753,24111345-31037,00.html