Morningstar

Morningstar, Inc.

Equity Bottom-Up

No-moat Suncorp Group surprised no-one with the announcement CEO Michael Cameron is stepping down. In our first-half fiscal 2018 result note published in February 2018 we stated “Longer-term we are positive on earnings growth, but any slip up will put increasing pressure on CEO Michael Cameron. Cameron started as CEO in late 2015 and financial results have been underwhelming. Cash earnings fell 8% in fiscal 2016, increased 3.6% in fiscal 2017 and we forecast a 7% decline in fiscal 2018--not an…

No-moat-rated Suncorp Group’s uninspiring third-quarter fiscal 2019 banking division results did not surprise. Sound asset quality and funding capacity were highlights, offset by a muted outlook on lending growth. There were no material developments that altered our long-term view of the regional bank and parent Suncorp Group. Nevertheless, pending the absence of any natural disasters in the near term, we would expect a slightly more positive outcome for Suncorp Bank’s fourth-quarter results…

No-moat-rated Suncorp Group’s sharp fall in first-half fiscal 2019 earnings was forewarned with the Sydney storm update on Jan. 3, 2019 but we were disappointed with the outlook for additional regulatory costs in second-half fiscal 2019, and higher natural hazard allowance and extra reinsurance costs in fiscal 2020. The Sydney hailstorm in December 2018 was the main culprit for the 13% decline in first-half fiscal 2019 cash profit to AUD 413 million compared with a year ago. Lower investment…

No-moat-rated Suncorp Group’s natural hazard update for the six months ended Dec. 31, 2018 again highlights earnings volatility in the general insurance sector in Australia and New Zealand. The estimated cost of individual natural hazard events over AUD 10 million total AUD 415 million pretax. Including an estimated AUD 185-195 million in natural hazard attritional claims, costing less than AUD 10 million, total natural hazard costs are a significant AUD 600-610 million for first-half fiscal…

Suncorp Group has delayed the sale of its Australian life insurance business to Feb. 28, 2019 from the previous intended date of Dec. 31, 2018 due to the slower than expected approval from the Australian Prudential Regulation Authority, or APRA. The extraordinary general meeting for Suncorp shareholders to vote on the proposal for the pro rata return of capital and share consolidation is now expected to be held following the completion of the sale in late February. The EGM was previously…

Australia

Suncorp Group Ltd. offers retail and business banking, life and general insurance, superannuation and funds management services.  The Company's services include personal banking and loans, personal insurance products, credit cards, pension savings accounts, term deposits, property development finance, commercial lending, investments and lease financing.

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