Suncorp has reported a 23.7% drop in group net profit after tax (NPAT) to $490 million during the first half of 2021 despite a 39.5% uplift in cash earnings.
The group’s cash earnings increased by 39.5% to $509 million, driven by higher earnings across all three business lines: insurance (Australia), banking and wealth and Suncorp New Zealand, the firm said in an announcement made to the Australian Securities Exchange (ASX).
The board also announced the payment of a fully franked dividend of 26 cents per share, which remained flat compared to the previous corresponding period, and represented a payout ratio of 65% of cash earnings.
At the same time, Suncorp’s banking and wealth arm reported an 11.1% growth in its profit after tax which stood at $190 million as the strong improvement in net interest margin and non-interest income were partially offset by a small increase in impairment charges versus the previous corresponding period and a small contraction in the lending portfolio.
The group said that although the operating environment improved, the outlook remained uncertain given the COVID-19 pandemic and its economic impact.
The group’s chief executive officer Steve Johnston said the 1H21 result demonstrated the focus on the core businesses and digitisation.
“Over the past year, we have refocused our strategy, continued to implement the ongoing regulatory program of work, improved our customer service, reinvigorated our brands, further digitised our business and become more efficient,” he said.
“We are seeing improved momentum in our Australian and New Zealand insurance businesses as evidenced by strong top-line growth, while our bank is also delivering improved performance.”
Suncorp also announced that it developed a three-year plan to help drive further efficiencies across its core businesses.