Suncorp has become the latest bank to announce a buyback after seeing profit growth in the insurance space of 42.4%.
In an announcement to the Australian Securities Exchange (ASX) of its results for FY20, the firm said insurance had been a strong contributor to the firm over the year, despite the challenging backdrop of COVID-19.
Insurance (Australia) exited several underperforming products and reported its strongest top-line growth since 2013 with gross written premiums up 5.5% to $8.7 billion.
There was a 42.4% growth in insurance profit after tax from $384 million in FY20 to $547 million in FY21. This was driven by growth, higher investment returns and increased prior year reserves.
Meanwhile, the firm sold its wealth business to LGIAsuper for $45 million in April 2021 which was expected to be completed in 2022, subject to regulatory approval. Following completion, Suncorp would enter into agreement to distribute Suncorp superannuation products to Suncorp customers for 18 months.
Group net profit after tax was up 13% to $1,033 million with group cash earnings of $1,064 million.
It announced a fully-franked final dividend of 40 cents per share (CPS) which brought the FY21 total dividend to 66 CPS. It would also pay a fully-franked special dividend of 8 CPS plus an on-market buyback of up to $250 million.
This was an “appropriate balance” between returning money to shareholders and retaining capital buffers for future uncertainty.
“In total, FY21 dividend payments are the share buyback equate to almost $1.2 billion returned to shareholders,” the firm said.
This followed buybacks previously announced by NAB and ANZ.
Suncorp also announced the appointment of Duncan West as a non-executive director, formerly chief executive at CGU Insurance and Vero Insurance, which would take effect from 23 September.in