The dividend is modest, proportionate to a NPAT of $400m.
Management energetically gestures to a 4.9% 'exit running yield' while the achieved yield in 1H was only 2.4%. Recent interest rate rises from near zero all happened in the period, so this looks about right. The quick reset of QBE's bond ladder to capture contemporary pricing is impressive as they will have redeployed many billions of dollars. Duration remains fairly short, entirely prudent given nobody can forecast future interest rates with any confidence.
Also gestured at is continuing strong rises in GWP, though with inflation at, say, 8% for the period, a 10.5% rise is positive though not special.
I have no idea how Mr Market will receive this result. We all chatter that he is forward looking. If so, QBE will be well supported.
Ash
QBE Price at posting:
$15.60 Sentiment: Buy Disclosure: Held
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