Slide 1: Financial results for the six months to 31 December 2012
For personal use only Suncorp Group Limited Financial results for the six months to 31 December 2012 1 20 February 2013 Financial results for the six months to 31 December 2012
Slide 2: Agenda
For personal use only Suncorp results presentation Agenda Results and operational highlights Patrick Snowball CFO report • Core business lines John Nesbitt • Non-core Bank • Group Capital Outlook Patrick Snowball Q&A Suncorp Leadership Team 2 20 February 2013 Financial results for the six months to
Slide 3: Introduction
For personal use only Introduction Patrick Snowball Chief Executive Officer, Suncorp Group Limited 3 20 February 2013 Financial results for the six months to 31 December 2012
Slide 4: 1H13 result overview
For personal use only 1H13 result overview 1H13 1H12 %∆ General Insurance NPAT 564 162 large Core Bank NPAT 144 156 (7.7) Suncorp Life NPAT 51 133 (61.7) Business lines NPAT 759 451 68.3 Non-core Bank and other (143) (15) n/a Acquisition amortisation (42) (47) (10.6) Net Profit After Tax 574 389 47.
Slide 5: Top line growth
For personal use only Top line growth Growth across all three business lines ($m) General Insurance GWP Suncorp Life individual 9.6% in-force business 6.6% 4,225 739 3,855 3,563 693 642 1H11 2H11 1H12 2H12 1H13 1H11 2H11 1H12 2H12 1H13 Core Bank lending assets Shareholder returns (cps) Interim divid
Slide 6: Healthy margins
For personal use only Healthy margins With profitable growth General Insurance underlying ITR Core Bank NIM 13.4% 1.92% 13.1% 1.83% Target range 1.75% to 1.85% 1.83% Meet or beat 12% 1H11 2H11 1H12 2H12 1H13 Suncorp Life planned profit margin release ($m) 11.2% 49 11.1% 47 47 10.5% 1H11 2H11 1H12 2H
Slide 7: Core business profitability
For personal use only Core business profitability Good earnings and great potential (NPAT $m) Core Bank Suncorp Life General Insurance 759 606 582 441 463 451 564 347 331 337 162 210 292 100 105 133 117 88 118 51 61 154 114 110 149 156 133 144 1H10 2H10 1H11 2H11 1H12 2H12 1H13 7 20 February 2013 Fi
Slide 8: Suncorp de-risking continues...
For personal use only Suncorp de-risking continues... Non-core Bank ($bn) • Non-core down to $3.4 billion, 20% of Impaired Performing original size • Excess capital of $1.27 billion 2.1 • Comprehensive reinsurance program, including Quota Share for Queensland Home 2.3 13.5 • Divested non-strategic a
Slide 9: Financial Results
For personal use only Financial Results John Nesbitt Chief Financial Officer, Suncorp Group Limited 9 20 February 2013 Financial results for the six months to 31 December 2012
Slide 10: General Insurance
For personal use only General Insurance Underlying ITR of 13.4% $m 1H13 %∆ General Insurance profit after tax 564 large • GWP up 9.6% • Reported ITR of 18.6% • Natural hazard claims below allowance by $113 million • Investment markets provided a mismatch benefit of $118 million • Delivered on the ‘m
Slide 11: Gross Written Premium
For personal use only Gross Written Premium GWP up 9.6% Product 1H13 %∆ Factors ($m) Motor 1,351 5.2 A combination of unit and premium growth Home 1,252 14.5 Premium increases to recover additional reinsurance costs Commercial 1,011 10.1 Strong growth in broker channel CTP 467 8.1 Strong growth in N
Slide 12: Underlying ITR
For personal use only Underlying ITR Meet or beat 12% underlying ITR 13.4% 13.1% FY12 11.2% 12.1% FY11 10.8% 11.1% 10.0% 10.5% FY10 9.0% Movement in 1H 8.0% Movement in 2H 1H10 2H10 1H11 2H11 1H12 2H12 1H13 12 20 February 2013 Financial results for the six months to 31 December 2012
Slide 13: Core Bank overview
For personal use only Core Bank overview Sustainable growth $m 1H13 %∆ Core Bank profit after tax 144 (7.7) • Housing lending growth of 5.9% and Agribusiness lending up 4.7% for the half • NIM 1.83% top end of the target range of 1.75%-1.85% • Retail deposit to core lending 66% remains in target ran
Slide 14: Core Bank - credit quality improving
For personal use only Core Bank - credit quality improving Non-performing loans ($Am) Impaired assets > 90 days past due SME & Agribusiness > 90 days past due retail NPLs / total loans (%) 600 532 554 534 501 510 2.35 500 471 481 441 2.15 400 1.95 1.75 300 1.55 200 1.35 1.34 1.32 1.28 1.23 1.15 100
Slide 15: Suncorp Life overview
For personal use only Suncorp Life overview Strong new business growth $m 1H13 %∆ Life profit after tax 51 (61.7) Life underlying profit after tax 61 (11.6) • Life risk new business up 18.2% • Individual Life Risk in-force up 6.6% • Embedded Value $2.4 billion • VOYS $46 million 15 20 February 2013
Slide 16: Non-core Bank reduced significantly
For personal use only Non-core Bank reduced significantly Non-core Bank ($bn) Suncorp Bank portfolio split Impaired Performing 7% Non-core 8% 2.1 Agri 11% Commercial 2.3 (SME) 13.5 1% Consumer 2.2 7.2 Mortgages 1.6 73% 3.5 1.8 HY10 HY11 HY12 HY13 16 20 February 2013 Financial results for the six mon
Slide 17: Group Capital
For personal use only Group Capital Capital strengthening continues • Repaid $575 million sub-debt 560 575 • Issued Basel III compliant CPS raising 322 244 $560 million 574 984 • Interim dividend 25 cents, up 25% Special dividend • DRP is non-dilutive 1,273 1,182 792 • Excess capital increases to $1
Slide 18: Group Capital: Proforma LAGIC/Basel III position
For personal use only Group Capital Proforma LAGIC/Basel III position • Excess capital increases to $1,653 million on Basel III/LAGIC basis 1,653 322 • Largest movement is the $322 million 152 71 treatment of expected dividend 1,331 • Proforma LAGIC/Basel III after expected 1,273 229 206 dividends i
Slide 19: Conclusion
For personal use only Conclusion Patrick Snowball Chief Executive Officer, Suncorp Group Limited 19 20 February 2013 Financial results for the six months to 31 December 2012
Slide 20: Delivered on year Strategy
For personal use only Delivered on 3 year Strategy Improvements across all three core businesses $m 31-Dec-12 31-Dec-09 Change NPAT 574 364 57.7% Interim dividend (cps) 25c 15c 66.7% General Insurance GWP 4,225 3,490 21.1% General Insurance reported ITR (%) 18.6% 12.8% up 5.8% General Insurance unde
Slide 21: Suncorp Group outlook
For personal use only Suncorp Group outlook Build on growth momentum and capitalise on the 4C’s • Entering 2013 with strong momentum across all businesses • New Simplification projects to build on Building Block benefits Group • Capitalise on the 4C’s – driving the Group competitive advantage • Full
Slide 22: The Suncorp journey
For personal use only The Suncorp journey Clarity, Simplicity and Relentless Execution FY13 - FY15 Reset business FY12 - FY16 & capital targets Simplification FY10 - FY12 program NOHC & Building • Licence consolidation FY10 Blocks program • Legacy system consolidation Stabilise the business • One pr
Slide 23: Supplementary slides February 2013
For personal use only Supplementary slides 23 20 February 2013 Financial results for the six months to 31 December 2012
Slide 24: Simplification costs and benefits
For personal use only Simplification costs and benefits Financial impacts of Simplification program 200 Simplification benefits 150 100 50 $m FY12 FY13 FY14 FY15 FY16 0 (50) (100) One-off project costs Net financial impact Annualised benefits of $200 million from FY16 One-off total project costs of
Slide 25: Building blocks delivering
For personal use only Building blocks delivering Contributing to 3%+ improvement in underlying GI margin 250 200 Pricing Benefits 150 100 50 Claims Benefits 0 Project costs (50) 2009/10 2010/11 2011/12 2012/13 $235 million annualised savings 25 20 February 2013 Financial results for the six months t
Slide 26: Natural hazards since 1967
For personal use only Natural hazards since Suncorp long-term catastrophic loss experience 1967 Events greater than $100m, gross of all reinsurance 4,500 Christchurch earthquakes, Brisbane 4,000 NZ AUS Long run average floods, Cyclone Yasi, Melbourne hailstorm 3,500 Brisbane flood, Cyclone Tracy New
Slide 27: FY13 Reinsurance program
For personal use only FY13 Reinsurance program Property catastrophe program AUD 6.1bn Reduction in upper limit of catastrophe program 5.3bn due to quota share 2.5bn 500m 2nd Reinstatement (paid as Original cover 1st Reinstatement previous tower is eroded) 250m 200m 150m NZ Dropdown NZ Dropdown 50m N
Slide 28: FY13 Reinsurance program
For personal use only FY13 Reinsurance program Dropdown aggregate program for Australian risks 250m 50m xs 200m xs 50m 100m xs 100m xs 150m xs 200m 150m xs 300m 200m Eroded by ex-TC 150m Oswald 100m xs 100m xs 50m xs 200m 50m xs 300m 50m Retention as at February 2013 28 20 February 2013 Financial re
Slide 29: Core Bank - credit quality
For personal use only Core Bank - credit quality Past due loans (90 days) to gross loans Home lending (QLD) Total home lending 0.96% 0.81% 0.82% 0.72% 0.69% 0.83% 0.60% 0.58% 0.74% 0.59% 0.50% 0.55% 0.77% 0.51% 0.66% 0.63% 0.39% 0.54% 0.50% 0.46% 0.45% 0.42% 0.34% 0.28% Jun-08 Dec-08 Jun-09 Dec-09 J
Slide 30: Life new business by channel
For personal use only Life new business by channel Strong results in individual business 1H13 Channel %∆ Comments ($m) IFA 35 16.7 Compelling proposition in Asteron Life Complete Direct 16 6.7 70% of sales were made to Group customers through the GI brands NZ 9 28.6 Comprehensive relaunch of the pro
Slide 31: Non-core Bank
For personal use only Non-core Bank Impaired asset balances… … by segment … by geography Performing Impaired Performing Impaired 9 712 153 597 158 430 421 655 191 422 759 256 331 573 13 161 348 94 114 248 53 144 Other Dev. Land Retail Office Other Prop. Other Corp. Gold Coast QLD (ex. GC) NSW VIC WA
Slide 32: Non-core Bank: Underperforming segments
For personal use only Non-core Bank Underperforming segments Coverage & additional coverage (1) Impaired asset turnover(2) Additional coverage 0% Provision coverage 13% 12% 10% 3% 11% 55% 135 0% 105 88 22% 24% 18% 18% 17% 13% 36 23 Retail Office Land Other Dev Other Prop Other Corp Non-core Retail O
Slide 33: Non-core Bank: Significant turnover in impaired asset portfolio
For personal use only Non-core Bank Significant turnover in the impaired asset portfolio Portfolio run-off & impaired turnover(1) $bn Impaired 1.3 2.1 Performing 2.0 Impaireds turnover 2.3 16.2 2.2 13.6 2.2 1.8 10.7 1.6 7.2 5.1 3.5 2.7 1.8 584 536 271 348 305 361 $m 160 Jun-09 Dec-09 Jun-10 Dec-10 J
Slide 34: Capital position December 2012
For personal use only Capital position 31 December 2012 General NOHC and Suncorp Group A$m Bank Life Insurance other entities Total Total capital 3,778 4,085 2,054 776 10,693 Target capital 3,214 4,054 1,920 232 9,420 Surplus capital 564 31 134 544 1,273 Target Ratios 1.45 times MCR 12.50% CAR 12.52
Slide 35: Proforma LAGIC & Basel III December 2012
For personal use only Proforma LAGIC & Basel III 31 December 2012 General NOHC and Suncorp Group A$m Bank Life Insurance other entities Total Total capital 4,171 3,984 785 471 9,411 Target capital 3,007 4,085 499 167 7,758 Surplus capital 1,164 (101) 286 304 1,653 Actual Ratios 2.01 times PCA 7.39%
Slide 36: Important disclaimer
For personal use only Important disclaimer This report contains general information which is current as at 20 February 2013. It is information given in summary form and does not purport to be complete. It is not a recommendation or advice in relation to the Group or any product or service offered by