Slide 1: Financial Results for the full year Data Pack
For personal use only Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Create a better today
Slide 2: Results
Results — For personal use only ‒ Group Net Profit After Tax of $1,075m (up 3.6%) ‒ Group top line growth 3.6% ‒ UITR 12% for 2H17 (2016: 10.6%) ‒ Dividend of 73c (up 7.4%) ‒ Cash ROE of 8.4% (2016: 8.2%) FY17 RESULTS 2
Slide 3: Highlights
Highlights — For personal use only ‒ Refreshed strategy and ‘One Suncorp’ model in place ‒ Delivering customer growth and a focus on digital ‒ Customers are experiencing the Marketplace deliverables ‒ Creating Shareholder value with Aggregate Reinsurance Program ‒ More resilient Suncorp for a sustai
Slide 4: Refreshed strategy and 'One Suncorp' model in place
1. Refreshed strategy and ‘One Suncorp’ model in place — For personal use only Create a better today Purpose Be the destination for the moments that matter Vision Priorities Maintain Elevate the Create the Inspire our momentum customer Marketplace people and grow One Suncorp Business model FY17 RESU
Slide 5: Delivering customer growth through refreshed strategy
2. Delivering customer growth through refreshed strategy — For personal use only Net Customer Flow Increased Digital Usage 0,000 147,000 net inflow AAMI SmartPlates Money Profiles + 399,000 252,000 SA CTP 0,000 app app 0,000 0,000 0,000 - -12,000 0,000 -71,000 FY15 FY16 FY17 18,000 users 34,000 user
Slide 6: Customers are experiencing the Marketplace Deliverables
3. Customers are experiencing the Marketplace Deliverables — For personal use only ‒ Concept Stores ‒ New branding and logo ‒ New AAMI and Suncorp Apps ‒ Launched annuities and health solutions ‒ Capturing the opportunity FY17 RESULTS 6
Slide 7: Creating Shareholder Value with Aggregate Reinsurance Program
4. Creating Shareholder Value with Aggregate Reinsurance Program — For personal use only $m 800 700 699 600 ‒ Significant NPAT benefit ‒ Capital benefit 500 460 400 300 ‒ Cover extended into FY18 200 100 0 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Retained Natural Hazard Costs Natural Hazard Aggr
Slide 8: More Resilient Suncorp for a Sustainable Future
5. More Resilient Suncorp for a Sustainable Future — For personal use only ‒ Top line growth and investment for the future ‒ Dividend and capital ‒ Re-alignment of investment portfolio ‒ Re-insurance ‒ Additional expertise FY17 RESULTS 8
Slide 9: Create a Better Today
Create a Better Today — For personal use only Business Improvement Program Marketplace Acceleration “Owner’s Mindset” “Faster and Sooner” ‒ Digitisation of customer experience ‒ Single digital customer experience (app) ‒ Sales and Service channel optimisation ‒ Roll-out of brand refresh ‒ End-to-end
Slide 10: Result overview
Result overview — For personal use only FY17 FY16 Change ($m) ($m) (%) Insurance (Australia) 723 558 29.6 Banking & Wealth 400 418 (4.3) ‒ Group top line growth of 3.6% New Zealand 82 183 (55.2) ‒ Function NPAT up 4.0% NPAT from functions 1,205 1,159 4.0 ‒ Cash earnings up 5.1% Other (60) (70) (14.3
Slide 11: Insurance (Australia)
Insurance (Australia) NPAT For personal use only FY17 FY16 Change — ($m) ($m) (%) Gross written premium 8,111 7,803 3.9 Net earned premium 7,072 6,893 2.6 ‒ NPAT up 29.6% to $723 million Net incurred claims (4,923) (5,099) (3.5) ‒ GWP growth of 3.9% Operating expenses (1,442) (1,411) 2.2 ‒ Reported
Slide 12: Gross Written Premiums
Gross Written Premiums For personal use only FY17 FY16 Change — ($m) ($m) (%) Motor 2,634 2,568 2.6 Home 2,233 2,193 1.8 ‒ Home & Motor return to positive unit growth with 3% to 5% price Commercial 1,543 1,577 (2.2) increases Compulsory third party 1,404 1,215 15.6 ‒ Commercial underwriting discipli
Slide 13: Claims
Claims 60 Home active claims 50 — volumes (‘000) For personal use only 40 30 20 10 ̶ Net incurred claims down 3.5% 0 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 ̶ Lower natural hazard claims Working Natural Hazards ̶ Operational metrics for Home and Motor working claims have 250 returned to sustainable level
Slide 14: Investments
Investments — For personal use only Insurance funds $9.2 billion Corporate ̶ Investment income of $205 million (FY16: $236 million) ILBs ̶ $120 million MTM loss from an increase in risk-free rates ̶ $43 million MTM gain from narrowing credit spreads Semis ̶ $52 million MTM gain from outperformance o
Slide 15: Life Insurance
Life Insurance NPAT For personal use only — FY17 FY16 Change ($m) ($m) (%) Planned profit margin release 19 15 26.7 – Stable underlying profits Experience (6) 19 n/a – Subdued new business volumes Other and investments (1) 40 19 110.5 reflecting challenging market Underlying profit after tax 53 53 -
Slide 16: Banking & Wealth
Banking & Wealth NPAT For personal use only FY17 FY16 Change — ($m) ($m) (%) Net interest income 1,131 1,129 0.2 – Total lending up 1.9% Net non-interest income 76 88 (13.6) – Annualised second half lending Operating expenses (636) (639) (0.5) growth of 4.2% Profit before impairment losses 571 578 (
Slide 17: New Zealand
New Zealand NPAT For personal use only FY17 FY16 Change — (NZ$m) (NZ$m) (%) Gross written premium 1,424 1,339 6.3 Net earned premium 1,163 1,139 2.1 – GWP grew 6.3%, driven by Home and Motor Net incurred claims (735) (612) 20.1 – Kaikoura earthquake and Operating expenses (387) (369) 4.9 reinsurance
Slide 18: Capital position
Capital position — For personal use only ̶ CET1 excess of $377 million 73 40 (148) 1,075 (56) (17) (35) ̶ GI changes in targets and (901) increased Asset Risk Charges ̶ Bank growth in risk weighted assets offset by RMBS issuance ̶ Capital release from Autosure 346 377 disposal Excess FY17 GI goodwil
Slide 19: Operating expenses
Operating expenses — For personal use only ‒ Operating expenses up 2.9% ‒ Direct expense base maintained 16 9 21 at around $2.7 billion for the past 32 2,746 4 years 2,701 2,669 ‒ Business Improvement Program to reduce operating and claims expenses from FY19 FY16 Group bonus Normalised Foreign Fire
Slide 20: Medium term targets
Medium term targets — For personal use only ̶ Broadening of customer relationships ̶ Improving underlying NPAT ̶ Sustainable ROE of at least 10%, which implies an underlying ITR of at least 12% ̶ Maintaining a dividend payout ratio of 60% to 80% of cash earnings and returning surplus capital to shar
Slide 21: Priorities
Priorities — For personal use only ‒ Elevate the Customer ‒ Create the Marketplace ‒ Maintain momentum and grow ‒ Inspire our people FY17 RESULTS 21
Slide 22: Highlights
Highlights — For personal use only ‒ Refreshed strategy and ‘One Suncorp’ model in place ‒ Delivering customer growth and a focus on digital ‒ Customers benefiting from roll out of Marketplace deliverables ‒ Creating Shareholder value with Aggregate Reinsurance Program ‒ More resilient Suncorp for a
Slide 23: Data Pack
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Data Pack For personal use only Data Pack
Slide 24: Suncorp Group
Suncorp Group Top 20 ASX listed company — For personal use only $19 billion market capitalisation Leading financial services brands at 30 June 2017 in Australia and New Zealand $97 billion in group assets 13,400 employees in Australia and New Zealand Approximately 9 million customers End-to-end owne
Slide 25: Strategy
Strategy — For personal use only FY17 RESULTS DATA PACK 25
Slide 26: Elevating the Customer
Elevating the Customer — For personal use only – Making the experience easy for customers – Connecting customers to the Suncorp Marketplace – Developing integrated solutions and customer journeys FY17 RESULTS DATA PACK 26
Slide 27: Elevating the Customer and Creating the Marketplace
Elevating the Customer and Creating the Marketplace For personal use only — Build the Marketplace Design connected Develop the partner Differentiate our brands solutions and services ecosystem (individually strong and deliver value when connected) FY17 RESULTS DATA PACK 27
Slide 28: Building the Suncorp Marketplace
Building the Suncorp Marketplace — For personal use only FY17 RESULTS DATA PACK 28
Slide 29: Designing end-to-end customer journeys
Designing end-to-end customer journeys For personal use only — Opportunity ‒ 3.3 million home owners ‒ 5.6 million vehicle owners ‒ 700,000 small business customers From To ‒ Unconnected range of products ‒ Seamless connection of and brands solutions and brands ‒ Winning customers at the end of ‒ Wi
Slide 30: Marketplace priorities
Marketplace priorities — For personal use only – Build intuitive digital experience for our customers and partners – Execute loyalty and differentiated service levels – Enhance sales and service productivity – Connect Intermediaries to the Marketplace to deepen relationships – Continue to deliver in
Slide 31: Key metrics
Key metrics — For personal use only FY17 RESULTS DATA PACK 31
Slide 32: Profit after tax from functions
Profit after tax from functions ($m) For personal use only — FY17 RESULTS DATA PACK 32
Slide 33: Profit and operating expenses from functions
1,159 1,205 Profit and operating Profit after tax 82 183 expenses from functions 400 For personal use only 418 — 723 558 FY16 FY17 Insurance Banking & Wealth New Zealand 2,669 2,746 Operating expenses 372 400 721 730 1,576 1,616 FY16 FY17 Insurance Banking & Wealth New Zealand FY17 RESULTS DATA PACK
Slide 34: Dividends
Dividends (cps) — 105 For personal use only 88 30 75 12 73 68 ̶ 73 cent total ordinary dividend, up 7.4% 20 55 40 38 ̶ Cash earnings payout 38 40 15 ratio of 81.9% 35 35 30 20 20 20 35 38 33 25 30 15 15 20 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 ■ Interim ■ Final ■ Special FY17 RESULTS DATA PACK 34
Slide 35: Capital position
Capital position ($m) As at 30 June 2017 — SGL, Total For personal use only Corp as at GI Bank Life Total Services 30 Jun & Consol 2016 CET1 3,115 2,963 461 86 6,625 6,338 CET1 Target 2,593 2,809 335 35 5,772 5,552 Excess to CET1 Target (pre div) 522 154 126 51 853 786 Group Dividend (476) (440) Gro
Slide 36: CET1 capital base
CET1 capital base ($m) — For personal use only 73 40 (148) 1,075 (56) (17) (35) (901) ̶ CET1 excess of $377 million ̶ GI changes in targets and increased Asset Risk Charges ̶ Bank growth in risk weighted assets offset by RMBS 346 377 issuance ̶ Capital release from Autosure Excess FY17 GI goodwill O
Slide 37: Group Risk Based Capital
General Insurance Bank Group Risk Based 7% 3% Capital (RBC) For personal use only — 38% 24% 54% 66% Group 8% 8% 6% Life Insurance Corporate 9% 100% 23% 17% 28% 58% 51% ■ Insurance risk ■ Market risk ■ Operational risk ■ Counterparty credit risk FY17 RESULTS DATA PACK 37
Slide 38: General Insurance capital
General Insurance capital — For personal use only Total capital ($m) Prescribed Capital Amount Capital ratios vs peers (PCA) ($m) 4,180 1.77x 1.81x 1.79x 1.77x PCA 555 510 2,358 CET1 Target (1.0 – 1.2x 294 PCA) 848 250 1.32x 1.27x 3,115 1.09x 569 900 (503) SUN Peer 1 Peer 2 ■ Common Equity Tier 1 ■
Slide 39: Bank capital
Bank capital — For personal use only Total capital ($m) Risk weighted assets ($m) Capital ratios vs peers 14.59% 14.71% 14.54% 4,685 13.80% 14.00% 32,107 14.59% RWA 12.57% 12.26% 897 3,424 62 825 CET1 Target (8.5% – 9.0% 9.23% RWA RWA) 28,621 9.29% 10.11% 9.60% 10.13% 9.97% 2,963 9.23% 8.05% SUN Reg
Slide 40: Life Insurance capital
Life Insurance capital — For personal use only Total capital ($m) Prescribed Capital Amount (PCA) ($m) 561 2.44x PCA 100 230 461 17 57 31 97 32 2H17 (4) ■ Common Equity Tier 1 ■ Insurance risk 2H17■ Combined stress ■ Tier 2 ■ Asset risk scenario adjustment ■ Operational risk ■ Other regulatory ■ Agg
Slide 41: Investment assets
Investment assets — For personal use only FY17 2% 2% 2% ($m) Insurance (Australia) investments 10% General Insurance - insurance funds 9,198 General Insurance - shareholders’ funds 2,737 Life shareholder assets 1,445 19% Insurance (Australia) total 13,380 65% New Zealand investments General Insuranc
Slide 42: History of major weather events
50 year history of major weather events — For personal use only Christchurch earthquakes, 6,000 $m Australia New Zealand Long Run Average Brisbane floods, Cyclone Yasi, Melbourne hailstorm 5,000 4,000 Brisbane flood, Cyclone Tracy Kaikoura Newcastle earthquake Melbourne & earthquake 3,000 Perth hail
Slide 43: Reinsurance program – natural hazards
Reinsurance program – natural hazards — For personal use only 6.9b 6.1b 2.5b 500m Original cover Reinstatement Reinstatement Reinstatement 250m 200m Dropdown aggregate Dropdown aggregate 50m Retention * Natural hazards protection Event 1 2 3 4 5 * Relates to Australian events. FY17 RESULTS DATA PACK
Slide 44: Reinsurance program – dropdown aggregate
Reinsurance program – dropdown aggregate — For personal use only 250m 50m xs 200m xs 50m 200m 100m xs 100m xs 150m xs 200m 150m xs 300m 150m 100m xs 100m xs 50m xs 200m 50m xs 300m 50m Natural hazards protection ` 300m xs 475m Event 1 2 3 4 5 * Relates to Australian events. FY17 RESULTS DATA PACK 44
Slide 45: Underlying and reported ITR
Underlying and General Insurance ITR reported ITR 18.6% For personal use only 17.0% — 14.8% 14.6% 13.9% 13.4% 13.6% 14.7% 12.8% 12.5% 14.0% 12.0% 12% 11.0% 10.1% 11.2% 11.0% 9.9% 10.3% 9.4% 7.8% 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 Reported ITR Underlying ITR FY17 RESULTS DATA PACK 45
Slide 46: Shareholder metrics EPS
Shareholder metrics EPS (basic) EPS (diluted) — For personal use only $0.89 $0.81 $0.84 $0.87 $0.80 $0.83 $0.57 $0.57 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Numerator ($m) Earnings (EPS basic) 730 1,133 1,038 1,075 Interest expense on convertible securities (net of tax) - 45 43
Slide 47: Shareholder metrics Cash EPS
Shareholder metrics Cash EPS (basic) Cash EPS (diluted) — For personal use only $1.02 $0.93 $1.01 $0.85 $0.89 $0.92 $0.83 $0.88 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Numerator ($m) Earnings (EPS basic) 1,304 1,191 1,089 1,145 Interest expense on convertible securities (net of t
Slide 48: Shareholder metrics Cash ROE
Shareholder metrics Cash ROE — For personal use only 9.4% 8.9% 8.2% 8.4% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Cash ROE Earnings ($m) 1,304 1,191 1,089 1,145 Average shareholders’ equity ($m) 13,868 13,345 13,282 13,631 FY17 RESULTS DATA PACK 48
Slide 49: Shareholder overview
Shareholder overview — For personal use only SUN shareholders by type SUN shareholders by geography 1% 1% 2% 4% 25% 6% 41% 11% 75% 34% ■ Domestic Institutions ■ Australia (Institutions & Retail) ■ Retail Investors ■ United States ■ Japan Source: Orient Capital, 23 June 2017 ■ International Instituti
Slide 50: Insurance (Australia)
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Insurance (Australia) For personal use only Insurance (Australia)
Slide 51: Insurance (Australia)
Insurance (Australia) NPAT FY17 FY16 Change For personal use only ($m) ($m) (%) — General Insurance Gross written premium 8,111 7,803 3.9 Net earned premium 7,072 6,893 2.6 – NPAT up 29.6% to $723 million Net incurred claims (4,923) (5,099) (3.5) – GWP growth of 3.9% Operating expenses (1,442) (1,41
Slide 52: General Insurance Gross Written Premium
General Insurance General Gross Insurance WrittenGross Premium Portfolio by product Portfolio by geography Written Premium For personal use only — 4% 2% 4% Total GWP of $8.1 billion 5% 17% 8% 26% 32% 21% 19% 34% 28% ■ Motor ■ CTP ■ Queensland ■ Western Australia ■ Home ■ Workers ■ New South Wales ■
Slide 53: General Insurance key ratios
General Insurance key ratios Loss ratio Total operating expenses ratio For personal use only — 73.2% 74.8% 72.4% 20.8% 20.3% 20.5% 66.8% 20.1% 1H16 2H16 1H17 2H17 1H16 2H16 1H17 2H17 Combined operating ratio Reported ITR 13.8% 94.0% 94.9% 12.0% 92.9% 8.7% 9.3% 87.1% 1H16 2H16 1H17 2H17 1H16 2H16 1H1
Slide 54: General Insurance reserve releases
General Insurance General Insurance reserve releases reserve releases For personal use only — $348m 4.4% $301m – Conservative assumptions and proactive long-tail claims 3.7% management Long-term assumption 1.5% of Group NEP FY16 FY17 FY17 RESULTS INSURANCE (AUSTRALIA) 54
Slide 55: Natural hazard events
Net costs Date Event Natural hazard ($m) Jul 2016 Southern winds 9 events Sep 2016 South Australian and Victorian flooding 8 For personal use only Sep 2016 Southern wind and rain 14 — Oct 2016 Victorian wind storm 18 Oct 2016 Young and Parkes hail 7 Nov 2016 South Australian and Victorian storms 104
Slide 56: General Insurance investment asset allocation
General Insurance investment asset allocation For personal use only — Insurance funds Fixed income credit quality Shareholders’ funds $9.2 billion $2.7 billion 4% 3% 6% 5% 5% 16% 9% 26% 44% 12% 23% 47% 60% 23% 17% ■ Cash and short-term ■ Semi-Government ■ AAA ■A ■ Cash and short-term ■ Equities depo
Slide 57: Personal lines market share
Personal lines market share NT For personal use only — 27% 29% QLD WA 32% 33% 15% 15% SA 15% 15% NSW 30% 26% VIC 33% 29% Motor Home TAS Source: Roy Morgan, June 2017 November 2016 39% 35% FY17 RESULTS INSURANCE (AUSTRALIA) 57
Slide 58: Personal lines market share
Total market Personal lines $19.2 billion market share 25% 28% For personal use only — 4% 2% 4% Home Motor $9.3 billion 7% $9.9 billion 30% 27% 26% 25% 29% 4% 4% 2% 2% 2% 7% 7% 6% 28% 31% ■ Suncorp ■ Peer 1 ■ Peer 2 ■ Peer 3 ■ Peer 4 ■ Peer 5 ■ Others Source: Roy Morgan, June 2017 FY17 RESULTS INSUR
Slide 59: Commercial lines market share
Commercial lines market share For personal use only — Total market $12.9 billion 12% 30% 18% 7% 20% 13% ■ Suncorp ■ Peer 1 ■ Peer 2 ■ Peer 3 ■ Peer 4 ■ Others Source: Latest Suncorp estimates FY17 RESULTS INSURANCE (AUSTRALIA) 59
Slide 60: Personal Injury market share
Personal Injury market share For personal use only — CTP * Workers compensation ** $4.3 billion $1.0 billion 7% 13% 24% 20% 35% 23% 5% 20% 17% * CTP source: Latest Suncorp estimates 18% 18% Includes QLD, NSW, ACT & SA schemes ** Workers compensation source: Workcover WA, November 2016 Includes WA on
Slide 61: CTP market share
QLD* NSW** CTP market share $1.0 billion 8% $2.6 billion 22% — 17% 28% For personal use only 48% 27% 31% 19% ACT*** SA* $171 million $364 million 30% 44% 56% 70% Source: State scheme regulators * as at May 2017 ** as at March 2017 *** as at June 2017 ■ Suncorp ■ Peer 1 ■ Peer 2 ■ Peer 3 ■ Peer 4 ■ R
Slide 62: Life Insurance
Life Insurance NPAT For personal use only FY17 FY16 Change — ($m) ($m) (%) Planned profit margin release 19 15 26.7 Experience (6) 19 n/a – Stable underlying profits Other and investments (1) 40 19 110.5 – Subdued new business volumes reflecting challenging market Underlying profit after tax 53 53 -
Slide 63: Life Insurance in-force premium
Life Insurance in-force premium For personal use only — Total in-force premium of $806 million Premium by product Premium by geography Premium by channel 7% 8% 10% 8% 12% 34% 27% 48% 19% 18% 82% 27% ■ Term & TPD ■ Income protection ■ Queensland ■ Western Australia ■ Direct via General Insurance bran
Slide 64: Life Insurance new business
Life Insurance new business For personal use only — Total new business of $62 million New business by product New business by geography New business by channel 8% 7% 5% 12% 22% 29% 24% 54% 25% 14% 73% 27% ■ Term & TPD ■ Income protection ■ Queensland ■ Western Australia ■ Direct via General Insuranc
Slide 65: Life Insurance key metrics
Life Insurance Planned margins Experience key metrics ($m) For personal use only — 9 10 8 9 10 7 (2) (4) – Higher planned profit margins and reduced experience profits 1H16 2H16 1H17 2H17 1H16 2H16 1H17 2H17 reflect assumption changes in June 2016 In-force premium Operating expenses * 813 806 801 92
Slide 66: Life Insurance meets a core customer need
Click to edit Master title style Life Insurance ― — For personal use only Life Insurance meets a core customer need Key Initiatives Outcomes Optimise efficiencies in claims Improved customer experience Health Travel and expense management Insurance Life Insurance Insurance Commercial Professional Su
Slide 67: Life Insurance market share
Life Insurance Life Insurance market In-force market share share $9.7 billion 14% 13% 13% 14% For personal use only 11% 11% — 9% 8% 7% Individual risk Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 SUN Peer 7 Others 21% New business 15% $1.0 billion 13% 12% 11% 10% 7% 7% 4% Source: NMG Consulting, March
Slide 68: Life Insurance market share by distribution channel
33% Life Insurance 29% Life Insurance Direct market share market share $1.1 billion For personal use only — Share by distribution channel 7% 6% 6% 8% 4% 4% 3% Peer 1 Peer 2 SUN Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Others 31% Bank $2.3 billion 19% 18% 18% 4% 4% 2% 3% 1% Source: NMG Consulting, March 20
Slide 69: Life Insurance market share by distribution channel
Life Insurance Life Insurance IFA 20% market share market share $6.3 billion For personal use only 14% — 13% 11% 10% 9% 8% Share by distribution channel 7% 8% Peer 1 Peer 2 Peer 3 Peer 4 SUN Peer 5 Peer 6 Peer 7 Others 24% 22% Group $7.0 billion 11% 9% 9% 8% 10% 6% 1% Source: NMG Consulting, March 2
Slide 70: Banking & Wealth
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Banking & Wealth For personal use only Banking & Wealth
Slide 71: Banking & Wealth
Banking & Wealth FY17 FY16 Change NPAT ($m) ($m) (%) For personal use only — Banking Net interest income 1,131 1,129 0.2 Net non-interest income 76 88 (13.6) – Total lending up 1.9% Operating expenses (636) (639) (0.5) – Annualised second half lending growth of 4.2% Profit before impairment losses o
Slide 72: Total lending portfolio
Total lending portfolio — Lending assets by portfolio Lending assets by geography For personal use only <1% Total assets of $55.3 billion 8% 4% 7% 10% 10% 53% 26% 81% ■ Housing ■ Agribusiness ■ Queensland ■ Western Australia ■ Commercial (SME) ■ Consumer ■ New South Wales ■ South Australia ■ Victori
Slide 73: Banking key ratios
Banking key ratios For personal use only — Lending growth (annualised) Net interest margin Cost to income ratio (interest-earning assets) 57.4% 4.55% 1.85% 1.86% 1.83% 3.65% 3.93% 1.72% 1.92% 53.4% 52.7% 52.5% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Impairment losses to gross loa
Slide 74: Home lending portfolio
Home lending portfolio — For personal use only Total assets of $44.8 billion Portfolio by borrower type Portfolio by geography Portfolio by channel 4% 8% 30% 34% 11% 49% 66% 70% 28% ■ Owner occupied ■ Investor ■ Queensland ■ Western Australia ■ Direct ■ Intermediaries ■ New South Wales ■ South Austr
Slide 75: Home lending origination by repayment type
Home lending origination by repayment type For personal use only — 18% 29% 30% 28% – Continued focus on a high 43% 40% quality lending portfolio including serviceability, credit quality and loan to value ratios – Investor year-on-year lending 82% growth of 4% well within the 71% 70% 72% supervisory
Slide 76: Commercial (SME) portfolio
Commercial (SME) portfolio — For personal use only Total assets of $5.7 billion Portfolio by industry Portfolio by geography Portfolio by exposure size 2% 12% 12% 9% 5% 32% 7% 15% 21% 51% 20% 73% 15% 17% 9% ■ Property investment ■ Retail ■ Queensland ■ Other ■ <$5 million ■ $10 - $25 million ■ Hospi
Slide 77: Agribusiness portfolio
Agribusiness portfolio — For personal use only Total assets of $4.5 billion Portfolio by industry Portfolio by geography Portfolio by exposure size 5% 10% 15% 3% 3% 34% 25% 49% 9% 29% 61% 7% 21% 29% ■ Beef ■ Sugar ■ Queensland ■ Other ■ <$5 million ■ $10 - $25 million ■ Grain & mixed farming ■ Fruit
Slide 78: Credit quality
333 Credit quality Gross impaired — loans by segment 99 218 206 For personal use only ($m) 173 62 62 208 60 125 117 79 – Continued focus on credit quality 26 31 27 34 and risk management FY14 FY15 FY16 FY17 – Impairment losses 0.01% of gross ■ Retail ■ Agribusiness ■ Commercial (SME) loans and advan
Slide 79: Loan to value ratio
5% Loan to value ratio 15% 12% 12% 9% 7% 5% 17% Home lending 22% 21% (LVR) assets by LVR 22% 23% 24% 22% 22% 22% For personal use only — 69% 71% 73% 74% Total home lending assets of 61% 62% 64% 66% $44.8 billion 1 H1 4 2 H1 4 1 H1 5 2 H1 5 1 H1 6 2 H1 6 1 H1 7 2 H1 7 ■ 0.00 – 80.00% ■ 80.01% - 90.00
Slide 80: Credit quality relativity to peers
Credit quality Impairment losses — to gross loans 0.26% For personal use only 0.17% 0.16% 0.13% 0.15% 0.10% Relativity to peers 0.01% SUN Regional 1 Regional 2 Major 1 Major 2 Major 3 Major 4 Net impaired 0.32% 0.34% loans to gross 0.30% loans 0.24% 0.23% 0.22% 0.19% Source: Latest peer financial re
Slide 81: Collective provision
Collective provision ($m) For personal use only 126 — 120 15 108 12 96 25 25 108 111 83 71 FY14 FY15 FY16 FY17 ■ Modelled collective provision ■ Management overlays FY17 RESULTS BANKING & WEALTH 81
Slide 82: Portfolio credit quality
Portfolio credit quality — For personal use only Commercial (SME) portfolio Agribusiness portfolio 5,531 5,772 5,729 6,000 5,353 5,356 15.00% 4,624 13.00% 5,000 4,311 4,400 4,360 4,497 12.00% 5,000 10.00% 11.00% 4,000 4.50% 4,000 9.00% 8.00% 3.22% 2.83% 2.68% 3,000 3,000 7.00% 1.76% 1.16% 1.16% 1.05
Slide 83: Long-term funding profile
For personal use only — profile ($m) Long-term funding FY17 RESULTS 1,000 0 100 200 300 400 500 600 700 800 900 Aug 17 Dec 17 Apr 18 Aug 18 Covered bond Dec 18 BANKING & WEALTH Apr 19 Aug 19 Dec 19 Apr 20 Aug 20 Dec 20 Apr 21 Aug 21 Dec 21 Apr 22 Aug 22 Domestic senior unsecured Dec 22 Apr 23 Aug 23
Slide 84: Liquid assets and Liquidity Coverage Ratio
Liquid assets and Liquidity Coverage Ratio — For personal use only Components of liquid assets ($b) Components of LCR* ($b) 12.1 12.2 LCR 130% 1.53 LCR 123% 11.4 1.90 4.20 3.80 4.3 4.3 4.4 3.8 2.5 6.35 6.80 5.0 4.05 4.53 4.1 4.5 2.8 FY15 FY16 FY17 FY16 FY17 ■ Cash, Government, Semi-Government ■ HQLA
Slide 85: Banking market share
Banking market share For personal use only — NT 1.6% Retail banking market share and Suncorp footprint 6 QLD 8.1% 107 11 482 WA 0.6% 1 1 94 SA 0.4% 1 1 85 NSW & ACT 1.0% 35 6 205 VIC 0.5% 7 2 395 Market share source: Roy Morgan, June 2017 Store Business centre ATM TAS 0.9% Footprint as at June 2017
Slide 86: Banking mortgage and business lending market share
Banking 26% 24% Mortgage lending market share For personal use only 16% 15% — 12% 3% 2% 2% ANZ CBA NAB WBC SUN BEN BOQ Others Business lending 22% 22% 19% 18% 15% 1% 2% 1% Source: APRA, May 2017 ANZ CBA NAB WBC SUN BEN BOQ Others FY17 RESULTS BANKING & WEALTH 86
Slide 87: Funds under management and administration
Funds under management and For personal use only administration ($m) — 397 (582) 206 7,490 7,511 Balance Inflows Outflows Investment Balance Jun-16 income and Jun-17 other FY17 RESULTS BANKING & WEALTH 87
Slide 88: New Zealand
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 New Zealand For personal use only New Zealand
Slide 89: New Zealand
New Zealand NPAT FY17 FY16 Change For personal use only (NZ$m) (NZ$m) (%) — General Insurance Gross written premium 1,424 1,339 6.3 Net earned premium 1,163 1,139 2.1 – GWP grew 6.3%, driven by Net incurred claims (735) (612) 20.1 Home and Motor Operating expenses (387) (369) 4.9 – Kaikoura earthqua
Slide 90: General Insurance Gross Written Premium
General Insurance Gross Written Premium For personal use only — Portfolio by product Portfolio by channel Total GWP of NZ$1.4 billion 3% 24% 28% 24% 40% 33% 48% ■ Motor ■ Commercial ■ Direct ■ Strategic partners & ■ Home ■ Other ■ Brokers financial intermediaries FY17 RESULTS NEW ZEALAND 90
Slide 91: General Insurance key ratios
General Insurance Loss ratio Total operating expenses ratio key ratios For personal use only — 63.5% 62.9% 53.9% 53.6% 33.4% 33.1% 32.6% 32.3% 1H16 2H16 1H17 2H17 1H16 2H16 1H17 2H17 Combined operating ratio Reported ITR 96.9% 96.0% 14.8% 16.5% 86.5% 85.9% 3.8% 5.7% 1H16 2H16 1H17 2H17 1H16 2H16 1H1
Slide 92: Natural hazard events
Natural hazard events For personal use only — Date Event Net costs (NZ$m) Nov 16 Kaikoura earthquake 20 Mar 17 Widespread North Island flooding 17 Apr 17 NZ Cyclone Debbie 8 Total events over $5 million (1) 45 Other natural hazards attritional claims 27 Suncorp Group Natural Hazard Aggregate Protect
Slide 93: General Insurance investment asset allocation
General Insurance investment asset allocation For personal use only — Insurance funds Fixed income credit quality Shareholders’ funds NZ$436 million NZ$374 million 2% 3% 5% 12% 10% 29% 26% 35% 66% 53% 59% ■ Cash and short-term ■ Local government ■ AAA ■A ■ Cash and short-term deposits deposits bonds
Slide 94: General Insurance market share
General Insurance market share For personal use only — 19% 20% Total market NZ$5.5 billion 4% 6% 7% 44% ■Vero ■AAI ■Peer 1 ■Peer 2 ■Peer 3 ■Others Source: Insurance Council New Zealand, March 2017 (Suncorp NZ) (Suncorp NZ) FY17 RESULTS NEW ZEALAND 94
Slide 95: Life Insurance
Life Insurance NPAT For personal use only FY17 FY16 Change — (NZ$m) (NZ$m) (%) Planned profit margin 31 32 (3.1) Experience 6 (1) n/a – Strong in-force premium growth of 7.0% Other 5 11 (54.5) – Positive experience driven by Underlying profit after tax 42 42 - strong policy retention Market adjustme
Slide 96: Life Insurance in-force premium
Life Insurance in-force premium For personal use only — Premium by product Premium by channel Total in-force premium of 3% 3% NZ$245 million 6% 16% 19% 52% 20% 81% ■ Term & TPD ■ Other ■ Direct ■ Group & other ■ Trauma ■ Group ■ Advised ■ Income protection FY17 RESULTS NEW ZEALAND 96
Slide 97: Life Insurance new business
Life Insurance new business For personal use only — New business by product New business by channel Total new business of NZ$26 million 7% 7% 17% 17% 58% 18% 76% ■ Term & TPD ■ Income protection ■ Direct ■ Group & other ■ Trauma ■ Group ■ Advised FY17 RESULTS NEW ZEALAND 97
Slide 98: Life Insurance key metrics
Life Insurance Planned margins Experience key metrics (NZ$m) For personal use only — 16 16 15 16 5 3 1 (4) 1H16 2H16 1H17 2H17 1H16 2H16 1H17 2H17 In-force premium Operating expenses 245 240 229 18 17 222 16 17 1H16 2H16 1H17 2H17 1H16 2H16 1H17 2H17 FY17 RESULTS NEW ZEALAND 98 98
Slide 99: Life Insurance market share
Life Insurance 27% In-force market share NZ$2.2 billion 19% For personal use only — 14% 11% 11% 10% Individual risk 8% Peer 1 Peer 2 Peer 3 SUN Peer 4 Peer 5 Others 24% 25% New business NZ$49 million 15% 15% 9% 9% 3% Source: Melville Jessup Weaver, March 2017 Excludes Group policies Peer 1 Peer 2 Pe
Slide 100: Economy
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Economy For personal use only Economy
Slide 101: Economic fundamentals
Economic Australia Queensland Data Fundamentals For personal use only Population growth 1.5% 1.5% Dec-16, annual — AUS: Mar-17 annual Economic growth 1.7% 2.0% QLD: 2015-16 annual – Supportive fundamentals for Unemployment rate 5.6% 6.3% Jun-17, trend both Australia and Queensland Inflation 2.1% 1.8
Slide 102: Growth Outlook
Growth Outlook — For personal use only GDP outlook State prospects 4.0 Annual % Change 3.5 – Recent quarters have seen domestic demand and income 3.0 accelerate 2.5 3.2% 2.0 3.3% 2.1% – Economic growth is forecast 1.5 2.1% to return to the long run trend 2.9% 1.0 of 3% ACT: 2.7% 0.5 – Queensland is
Slide 103: Inflation and interest rates
Monetary policy remains Inflation and 8 % Source: ABS, RBA, Bloomberg highly supportive interest rates 7 For personal use only 6 — 5 4 RBA ‘Neutral’ Cash Rate Estimate Inflation 3 Target Range 2 – With the cash rate well below 1 ‘neutral’, the RBA is expected Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-1
Slide 104: Housing and household debt
Housing and household House prices 1,100 risks contained 1,000 Median house price ($ '000) For personal use only 900 — 800 700 600 500 – Elevated debt, areas of strong price 400 Source: Bloomberg, ABS, RP Data growth and pockets of oversupply 300 Jun-07 Jun-09 Jun-11 Jun-13 Jun-15 Jun-17 represent r
Slide 105: Labour market and business sentiment
Labour market has Labour market 80 6.4 clearly strengthened 60 Change Per Month ('000) 6.2 For personal use only — 40 6.0 5.8 20 5.6 0 5.4 -20 5.2 – Recent months have seen a Source: Bloomberg -40 5.0 clear improvement in job Jun-2012 Jun-2013 Jun-2014 Jun-2015 Jun-2016 Jun-2017 creation, accompanie
Slide 106: Commodity prices and international trade
Favourable external 170 Commodity prices $US price sector 150 For personal use only 130 Iron Ore — 110 Thermal Coal 90 70 – Commodity prices have lifted, 50 WTI Oil Source: Bloomberg assisted by improved Chinese 30 industrial activity Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 – Australia now consist
Slide 107: Glossary
Financial Results for the full year DATA PACK RELEASE DATE 3 AUGUST 2017 ended 30 June 2017 SUNCORP GROUP LIMITED — ABN 66 145 290 124 Glossary For personal use only Glossary
Slide 108: Glossary
Acquisition expense Glossary ratio Acquisition expenses expressed as a percentage of net earned premium — ADI Authorised Deposit-taking Institution For personal use only The value of annuity obligations are determined by discounting future obligations into today’s dollars using risk-free rates. The
Slide 109: Glossary
Common Equity Common Equity Tier 1 Capital comprises accounting equity plus adjustments for Glossary Tier 1 (CET1) intangible assets and regulatory reserves — Common Equity Tier 1 Ratio Common Equity Tier 1 divided by the Prescribed Capital Amount for Life and General Insurance, or total risk-weight
Slide 110: Glossary
The expense levied on premiums for insurance policies with a fire risk component, Glossary Fire service levies (FSL) which is recoverable from insurance companies by the applicable State Government. Fire service levies were established to cover corresponding fire brigade charges — Funds under For pe
Slide 111: Glossary
Life risk new Glossary business annual Total annualised statistical premium for policies issued during the reporting period premiums — Net profit after tax less market adjustments. Market adjustments represents the For personal use only Life underlying profit impact of movements in discount rates on
Slide 112: Glossary
Profit after tax from The net profit after tax for the Insurance, Banking & Wealth and New Zealand Glossary functions business lines — Return on average Net profit after tax divided by average equity attributable to owners of the Company. For personal use only shareholders' equity Averages are based
Slide 113: Disclaimer
Disclaimer — For personal use only This report contains general information which is current as at 3 August 2017. 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 Suncorp or
Slide 114: To see more, go online
To see more, go online For personal use only suncorpgroup.com.au — Registered office Level 28, 266 George Street Brisbane, Qld Australia 4000 +61 7 3362 1222 Investor relations contacts Andrew Dempster Ph: 02 8121 9206 Susan Troy Ph: 07 3135 3729 Sophie Bastin-Byrne Ph: 07 3135 4700 Gabrielle Gulliv