Suncorp Group Limited · ASX:SUN
Suncorp — Macquarie Australia Investment Conference 2015
20 slides from Suncorp's conference presentation, May 8, 2015
Slide 1: Macquarie Australia Investment Conference Presentation
ASX announcement 8 May 2015 For personal use only The Manager Market Announcements Office ASX Limited Level 4 Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Macquarie Australia Investment Conference Presentation Please find attached a copy of the Suncorp Group’s presentation to be delivered today
Slide 2: Introduction and agenda
For personal use only Good morning and thank you. Today I will provide you with an update on the Suncorp story, spend some time talking through our quarterly bank disclosures, while also addressing some topical general insurance issues. Suncorp Group Limited - ABN 66 145 290 124 - GPO Box 1453, Bris
Slide 3: The Suncorp shareholder promise
For personal use only But I will start this presentation the same way I start all presentations relating to the Suncorp Group, and that is with our Shareholder promise. The Suncorp shareholder promise centres around our objective to build a simple, low-risk, financial services group that delivers bo
Slide 4: Simplification, de-risking, yield and growth
For personal use only There are four key elements to the way we describe our company to shareholders – simplification, de-risking, yield and growth. Over the past five years Suncorp has become a far simpler business for you to understand and value. The Group’s legal structures have been streamlined
Slide 5: Multiple sources of profit supporting dividend and yield
For personal use only But first let me address a point that is often overlooked in the analysis of our business, particularly when that analysis is exclusively focussed on the insurance cycle. As a diversified financial services group, Suncorp has multiple sources of profit that ultimately support d
Slide 6: Growth opportunity across five businesses
For personal use only We are also often asked how we justify our view that we can deliver high yield while still growing strongly. The answer again lies in our unique business model and our five businesses operating in different parts of the financial services industry, with different shares of thei
Slide 7: Bank quarterly update: lending growth
For personal use only Turning to today’s disclosures and in particular to the Bank’s quarterly update on credit quality and growth. At the half year result we pointed to an improving growth profile for the Bank following a period of consolidation and margin improvement. While much of that growth sat
Slide 8: Loan origination profile and diversification
For personal use only Perhaps the most pleasing aspect of this strong quarterly growth has been its origination profile with over 89% of new loans written at, or below, 80% loan-to-valuation ratio. The graph on the slide demonstrates the significant improvement in the disbursement profile that has o
Slide 9: Credit quality and impaired loans
For personal use only The Bank also retains a strong focus on serviceability - ensuring credit quality is of paramount importance. Gross impaireds are tracking in the right direction - down 3.8% for the quarter and representing just 48 basis points of gross loans and advances. The marginal increase
Slide 10: Bank CET1 capital
For personal use only To Bank capital, and at 8.82%, CET1 has stabilised this quarter and remains comfortably within the Bank’s revised target range. You will recall at the half year we took the prudent step to increase the Bank’s CET1 target to a range of 8.5% - 9%. We remain very comfortable with
Slide 11: Bank capital strength on risk-adjusted basis
For personal use only However, along with the other regionals, the absolute amount of capital held is far greater when you wash through the distortion of differential risk weightings as rating agency S&P do when the calculate their risk adjusted capital ratio. And, don’t forget, our Bank sits alongs
Slide 12: Bank summary and outlook
For personal use only In summary, we feel this quarterly disclosure demonstrates the Bank's ability to grow in a sustainable and disciplined manner. I would, however, caution against taking this quarterly growth and simply annualising it. We remain committed to growing our mortgage book at 1 to 1.3
Slide 13: General insurance: reinsurance update
For personal use only To General Insurance now and I’d like to update you on a few topical issues. The first is an update on a 2011 reinsurance issue that emerged on the eve of the half year result. We have been working with our reinsurance partners and advisers to address an issue that is both high
Slide 14: Natural hazard allowance methodology
For personal use only This has been an exceptional year for weather events and has again called into question the adequacy of natural hazard allowances across the industry. By way of background our natural hazard allowance is an actuarial calculation across three categories of claims using an array
Slide 15: Natural hazard claims this financial year
For personal use only I’ve shown on this slide the events that have us heading towards $1 billion in natural hazard claims this financial year. The most recent event, in Brisbane last Friday, is expected to cost up to $55 million. To put the full year outcome in perspective, last year, our natural h
Slide 16: Impact of events on reinsurance program
For personal use only This slide shows how the major events have impacted our reinsurance program. For those of you not familiar with reinsurance it can take a bit of explaining but essentially the areas in green represent layers of reinsurance protection we have purchased. The areas in grey represe
Slide 17: The general insurance cycle
For personal use only Finally, I’d like to address the topical subject of the general insurance ‘cycle’. A lot has been written about this and I’ll reiterate Suncorp’s position. Over the past four years we have had two major programs of work, Building Blocks and Simplification, that have significant
Slide 18: Factors impacting the insurance industry
For personal use only There are three other key factors that I believe may impact on the insurance industry and run counter to those that believe there is a ‘race to the bottom’. Firstly, as I outlined earlier, FY15 is looking like the worst year for medium-sized weather events in recent history. Th
Slide 19: For personal use only
For personal use only Suncorp Group Limited - ABN 66 145 290 124 - GPO Box 1453, Brisbane QLD 4001 www.suncorpgroup.com.au 18
Slide 20: For personal use only
For personal use only Suncorp Group Limited - ABN 66 145 290 124 - GPO Box 1453, Brisbane QLD 4001 www.suncorpgroup.com.au 19
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