Suncorp boss Steve Johnston flags $4.6b-plus cash splash after bank sale, benign start to disaster season

Queensland insurer Suncorp is rewarding shareholders after posting a $1.1 billion half-year profit, thanks to a relatively quiet start to the disaster season and the sale of its banking business.

Suncorp has flagged a $3-a-share capital return on March 5 from the $4b bank sale to ANZ, plus an ordinary dividend of 22¢ and a 41¢ special dividend. Both dividends are fully franked and will be paid on March 14.

The $4.6b of shareholder payments were unveiled ahead of chief executive Steve Johnston flagging more capital returns, most likely through an on-market share buyback.

Mr Johnston said it was pleasing to be able to make the returns first foreshadowed when the $4.9b Suncorp-Metway Bank sale was unveiled in July 2022, subject to a variety of approvals and legislative amendments.

“These results reflect our discipline in executing strategic and operational priorities,” he said. “We have delivered to our commitments, we are financially strong and resilient, and we have created future capacity to invest in initiatives to support our customers.”

The Suncorp-Metway Bank sale, completed on July 31 last year, was part of the Australian Securities Exchange-listed company’s focus on its consumer, commercial and compulsory third-party insurance operations.

Suncorp sold its Asteron Life operations in New Zealand to Resolution Life last month, but retains its Kiwi motor and general insurance businesses.

Suncorp’s $1.1b net profit for the six months to December 31 was $518m higher than the interim result for 2023-24.

The latest result included $247m of profits from business sales or from operations that had been sold. That’s a $318m turnaround when compared with $71m of losses from offloaded operations in 2024-25.

The next biggest contributor to the near-doubled bottom line were profits from its Australian consumer insurance operations, which surged by $220m to $423m.

Suncorp said the total cost of natural disasters was $503m, $277m below the allowance for the December half, thanks to what it described as “benign natural hazard period”. There were six weather events in Australia that cost above $10m in the half.

Suncorp New Zealand profits surged by $134m to $208m, also thanks to a relatively benign half year across the Tasman Sea.

While acknowledging the good tidings in the December half, Mr Johnston said insurers were on the front line of climate change and emphasised the importance of being prepared.

“Severity and frequency of extreme weather is becoming an increasingly large part of everyone’s premiums through natural hazard budgets and reinsurance protection,” he said.

“While we benefited from good weather conditions well below our expectations this half, over the last five years, we have delivered in line with our increasingly robust natural hazard budget.”