Suncorp Group Limited · ASX:SUN
Suncorp — Suncorp Metway — FY2001 Earnings Presentation
32 slides from Suncorp's earnings presentation, Aug 14, 2001
Slide 1: Suncorp Metway Ltd Annual results presentation
SUNCORP METWAY LTD Annual results presentation 14 August 2001 1
Slide 2: Net profit and dividend rise
Net profit and dividend rise 395 52 + 18% + 13% 335 46 2000 2001 2000 2001 Net profit ($m) Dividend (cents) 2
Slide 3: Return on Equity
Return on Equity Diluted (%) 18.0 18.7 17.3 15.1 16.6 13.6 12.4 11.3 10.5 Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 NB: 18.7% is based on weighted average equity, including $638 million in new equity issued in June. 16.6% is fully diluted, based on a simple average annual equity. 3
Slide 4: Highlights
Highlights • Strong sales growth across all divisions • Significant investment in new business/growth initiatives • Allfinanz progressing steadily • Acquisition of AMP/GIO general insurance proceeding smoothly 4
Slide 5: Pre-tax profit
Pre-tax profit ($m) 499 465 104 130 320 Income Tax 73 395 335 Net profit 247 Jun 99 Jun 00 Jun 01 Excluding Life & Super policyholder interests. 5
Slide 6: Operating income
Operating income* ($millions) 1993 1781 243 +12% 1673 244 267 Inv Income 199 Other Income 164 191 969 840 871 GI Premium & Recoveries Net Interest 470 475 514 1999 2000 2001 *Excluding policyholders’ interests 6
Slide 7: Operating expenses
Operating expenses* ($millions) 602 584 Equipment, 101 545 +7% 74 Occupancy 84 Staff 318 313 290 Marketing, IT, Other 183 171 197 1999 2000 2001 *Excluding policyholders’ interests 7
Slide 8: Capital - Jun 01
Capital - Jun 01 17.4% $623m 3.4% $521m 14.0% 13.4% Capital $558m $2194m notes Share $1534m capital* Tier 1 Tier 2 Deductions Net Capital *Including retained profits and reserves, less intangibles and future income tax benefit 8
Slide 9: Capital - Post GIO
Capital - Post GIO 21.4% 5.6% 11.4% $873m 15.8% $1781m 10.0% Share $2467m capital* $1559m Tier 1 Tier 2 Deductions Net Capital *Including retained profits and reserves, less intangibles and future income tax benefit 9
Slide 10: Profit by division
Profit by division Before goodwill and tax ($m) 284 229 211 163 53 30 Wealth Management Gen Ins Banking Jun 00 Jun 01 10
Slide 11: Banking Highlights
Banking Highlights • Profit up 24% to $284 million • Lending volumes rising strongly • Margin steady at 2.48% • Cost to income ratio reduced to 52.9%* • Credit quality remains sound *Excluding one-off costs and accounting changes 11
Slide 12: Banking income
Banking income ($millions) 665 593 151 Non-interest 118 +28% income Net interest income 514 475 +8% Jun 00 Jun 01 12
Slide 13: Loan portfolio mix and growth
Loan portfolio mix and growth ($billions) 19.94 17.95 16.73 Other Commercial Property 11.66 +14% Housing Jun 99 Jun 00 Jun 01 Growth 5.8% 7.3% 11.1% 13
Slide 14: Owner-occupied housing growth
O/Occupied housing growth (Annual growth in assets %) 20% 15% 10% 5% 0% Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Suncorp Metway Banking system Source: APRA 14
Slide 15: Net interest margin and spread
Net interest margin and spread (%) 3 2.55 Margin 2.47 2.47 2.48 2.41 2.5 2 2.19 2.2 2.2 2.21 2.12 Spread 1.5 1 0.5 0 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 15
Slide 16: Banking expense ratios
Banking expense ratios (%) 80 2.2 75 2 2.10 70 1.8 65 Cost-to-assets 63.3 1.61 60 1.6 55 1.4 50 52.9 Cost-to-income 1.2 45 40 1 Jun-98 Jun-99 Jun-00 Jun-01 Excluding one-off costs and accounting changes 16
Slide 17: Asset quality
Asset quality 1.07 0.96 0.94 0.64 Impaired assets, % of gross loans 1998 1999 2000 2001 Total Provision (%of Impaired Assets) 85% 83% 72% 110% 17
Slide 18: General Insurance highlights
General Insurance highlights • GIO acquisition • Strong premium growth (12% excluding CTP) • Rates hardening across classes • Risks in force increased across all classes • Solid investment returns 18
Slide 19: Insurance pre-tax profit
Insurance pre-tax profit ($millions) 211 Inv Income 163 S/h Funds 98 80 Other 7 80 5 Trading 106 Result 78 Jun 00 Jun 01 19
Slide 20: Insurance trading result
Insurance trading result ($millions) Full year to: Jun 00 Jun 01 % Net premium revenue 739 771 4 Net claims (601) (665) 11 Operating expenses (178) (191) 7 Underwriting result (40) (85) 113 Investment revenue - Insurance Provisions 146 163 12 Trading result 106 78 (26) Insurance margin 14.2% 10.1% 2
Slide 21: Insurance expenses
Insurance expenses ($millions) 856 779 110 Other 97 81 Acquisition 81 665 Claims 601 +11% Jun 00 Jun 01 21
Slide 22: Solvency
Solvency ($ Millions) 754 Net Assets 567 476 Solvency 323 Surplus Minimum 244 278 Capital Jun 00 Jun 01 Coverage multiple 2.32 2.71 22
Slide 23: GI Product lines
GI Product lines • Commercial - strong premium growth - poor claims experience • Home and Motor - strong growth in RIF - good profitability • CTP - deregulation managed successfully 23
Slide 24: Wealth Management highlights
Wealth Management highlights • Strong new business sales • Distribution force expanded • Expenses stable • Investment results over benchmark 24
Slide 25: Wealth Management highlights
Wealth Management highlights ($millions) Full year to: Jun 00 Jun 01 % Planned margins 21 28 33 Experience profits(losses) (2) 3 Investment Income 11 10 (9) Other revenue 12 26 117 Other expenses (12) (14) 17 Profit 30 53 77 25
Slide 26: Strong new business sales
Strong new business sales ($millions) 337 167 91 98 62 21 17 2 Investment Inv Choice Unit Trusts Super Jun 00 Jun 01 26
Slide 27: Products per MFI customer
Products per MFI customer 3.57 Mar-98 Mar-99 Mar-00 Mar-01 2.39 2.49 2.33 2.15 1.9 SGB WBC ANZ CBA NAB SUN * Customers who nominate SML as main financial institution. 12 month moving average Roy Morgan Research SGB St George, Advance, Bank SA; WBC Westpac, Bank Melbourne, Challenge, AGC; ANZ ANZ Ban
Slide 28: GIO acquisition
GIO acquisition • Proceeding to plan • Management team selected • Detailed integration planning under way • Settlement to occur in September • Funding arrangements in place • Synergies, returns as previously stated 28
Slide 29: Quantum leap in scale
Quantum leap in scale GWP ($Billion) 2.5 1.9 1.9* 1.2 1.3 1.2 0.8 0.7 0.6 Zurich ING SUN QBE Allianz CGU RSA SUN NRMA alone Source: APRA, latest available, December 1999 figures. The figures exclude HIH premium revenues which have been redistributed.Figures exclude joint venture business 29
Slide 30: Product Diversification
Product Diversification Gross Written Premium 100% =$767m 100% = $1.9b* Workers 13% Comp CTP 45% 22% CTP 20% Commercial Commercial 18% 20% Home Home 15% Motor 22% 25% Motor SUN SUN&GIO Dec 2000 * Excluding JVs 30
Slide 31: Geographic Diversification
Geographic Diversification Gross Written Premium 100% =$767m 100% = $1.9b* Other States 4% 14% Other States NSW 5% 12% Vic 34% NSW Qld 91% Qld 40% SUN SUN&GIO Dec 2000 * Excluding JVs 31
Slide 32: Outlook for 2001/02
Outlook for 2001/02 • Economic and industry conditions favourable • Investment in growth to continue, monitored closely • GIO effect to be cash EPS neutral • Tax rate down, but savings from capital notes ends • Continued improvement in underlying performance 32