Suncorp Group Limited · ASX:SUN
Suncorp — Suncorp-Metway — Macquarie Investor Conference, Sydney 2008
20 slides from Suncorp's conference presentation, May 7, 2008
Slide 1: Suncorp-Metway Limited
Suncorp-Metway Limited John Mulcahy Chief Executive Officer and Managing Director 7 May 2008 Macquarie Investor Conference, Sydney
Slide 2: Topics
Topics 1. Integration update 2. General Insurance 3. Banking 4. Funding 5. Capital 2
Slide 3: Half Year Result to 31 December 2007
Half Year Result to 31 December 2007 General Wealth Banking Insurance Management PBT and Bad Debts PBT $172m Underlying profit after tax* $323m (+9.9%) (-75.4%) $85m (+9.0%) Net interest income Net earned premium Life Risk annual premium $484m (+6.6%) $2.9bn (+3.0%) $675m (+15.4%) Cost to income rat
Slide 4: Suncorp FY08
Suncorp FY08 Banking – growth in profit before tax and bad debts 10% - 12% General Insurance – ITR inc. $90m integration benefits 9% - 12% Wealth management – underlying profit growth >10% Dividend nominal growth 4
Slide 5: Successful delivery of integration benefits
Successful delivery of integration benefits PHASE 1: PHASE 2: PHASE 3: Settling in Design Implementation • Mar – Jul 2007 • Jul – Nov 2007 • Dec 2007 onward • Develop business model • Integration initiatives identified • Implementation of over 300 • ‘Quick wins’ of $55m • Revised benefits & costs of
Slide 6: Integration implementation
Integration implementation Examples of key initiatives recently completed: 1. Mainframe consolidation • Successful consolidation of mainframe applications onto a single and new mainframe platform • Completed April 2008 • $6m mainframe related cost savings per annum 2. Consolidated travel sourcing 3.
Slide 7: Group media negotiations
Group media negotiations Post-merger Pre-merger Group consolidation & leverage Suncorp Group Calendar Year Financial Year Media Single Annual Media market market Calendar Year place place Calendar Year & Others Ad Hoc Benefits Efficiency: Significant Group rate benefits Flexibility: Brand and geogra
Slide 8: General Insurance update
General Insurance update Claims update - Mackay flooding - $100m (net of reinsurance recoveries) - Melbourne windstorms – approx $20m - Other events (Rockhampton, Cairns, Emerald) - relatively minor Premium increases - Continue to be a feature of calendar 2008 - Focus on restoring profitability, par
Slide 9: Banking update…additional funding costs passed on
Banking update…additional funding costs passed on Retail lending – Suncorp Variable Mortgage rate 9.47% 8.57% 9
Slide 10: Banking update…additional funding costs passed on
Banking update…additional funding costs passed on Fixed rates** Suncorp Reference Rates* * Additional funding costs passed on to customer ** Funding costs hedged to customer rates 10
Slide 11: While impaired assets have increased…
While impaired assets have increased… Impaired Assets as a % of Risk Weighted Assets 1.00% 0.90% Key: 0.80% ANZ CBA 0.70% NAB 0.60% WBC 0.50% SGB 0.40% Majors 0.30% SUN 0.20% 0.10% 0.00% FY01 FY02 FY03 FY04 FY05 FY06 FY07 *Actual and Estimated figures from Macquarie Research 11
Slide 12: ... credit quality will continue to limit write-offs
... credit quality will continue to limit write-offs Bad & Doubtful Debt Expense/Risk Weighted Assets* 0.60% Key: 0.50% ANZ CBA 0.40% NAB WBC 0.30% SGB Majors 0.20% SUN 0.10% 0.00% FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08E FY09E FY10E *Actual and Estimated figures from Macquarie Research 12
Slide 13: Global Diversification of Funding
Global Diversification of Funding EUROPE ECP Senior Debt - Benchmark Issuance UNITED STATES Sub-debt – Bank & Insurer ASIA Commercial Paper Securitisation Samurai Private Placements Senior Debt Sub-debt AUSTRALIA Deposits NCD’s Bank Bills Senior Debt Private Placements Sub-debt Capital In addition t
Slide 14: Capital Raising – Tier 1 Hybrid
Capital Raising – Tier 1 Hybrid Security • Convertible preference shares (CPS) Offer Size • Up to $325m, with the ability to accept oversubscriptions Issue Price • $100 per CPS Regulatory • Non-innovative Residual Tier 1 Capital • Preferred, non-cumulative, quarterly, based on a floating rate and ex
Slide 15: Capital position
Capital position Reported Updated 30 Jun 31 Dec 31 Dec Target 2007 2007 2007 Bank Capital Adequacy ratio 9.86% 10.84% 11.88% 10.0%-10.5% Bank ACE 5.05% 4.54% 4.68% 4.5%-5.0% GI MCR Coverage 2.02x 1.99x 2.07x 1.53x Updated 31 Dec 2007 calculation includes the impact of the 65% underwriting of the div
Slide 16: APRA Amendments to GI Prudential Standards
APRA Amendments to GI Prudential Standards “APRA is not expecting insurers to respond to these changes with increases in their levels of capital; the industry is already well capitalised, with aggregate industry capital exceeding twice APRA's current minimum requirements.” John Trowbridge, APRA Pres
Slide 17: Summary
Summary Underlying business very strong Premium increases following weather events Diverse and secure funding base Further securing capital base Placed to capitalise on integration 17
Slide 18: Disclaimer
Disclaimer This report contains general information which is current as at 7 May 2008. It is not a recommendation or advice in relation to Suncorp-Metway Limited or any product or service offered by the Suncorp Group. This report should be read in conjunction with all other information concerning Su
Slide 19: Questions?
a “ SUNCORP Questions?
Slide 20: Investor Relations Contacts
Investor Relations Contacts Steve Johnston steve.johnston@suncorp.com.au Tel: +61 (0)7 3835 5281 Buy-side enquiries Nicole Marques nicole.marques@suncorp.com.au Tel: +61 (0)7 3836 1960 Sell-side enquiries Mark Ley mark.ley@suncorp.com.au Tel: +61 (0)7 3835 5639 www.suncorp.com.au 19
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