Australia's Suncorp-Metway H1 net profit 527 mln aud; beats market estimates

Australia's Suncorp-Metway H1 net profit 527 mln aud; beats market estimates

	Published : Tue, 20 Feb 2007 04:30 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Banking and insurance group Suncorp-Metway Corp Ltd said its first half to December net profit rose 16 pct year-on-year to 527 mln aud, beating the market consensus estimate for earnings of 480 mln aud.

Suncorp chairman John Story said the result was driven by strong performances from the banking and wealth management divisions, while profitability also increased in the insurance arm.

'The company is on track to deliver its full-year forecast of a 10 pct rise in profit before tax and bad debts within the bank, and a 16-19 pct insurance trading margin for the general insurance business,' Story said in a statement.

The company said its insurance trading margin -- which measures the profitability of the insurance business -- rose to 21 pct in the half from 19.3 pct a year ago, though the gross written market premium fell 1.2 pct year-on-year as soft market conditions persisted in commercial lines and competition intensified in personal lines.

Suncorp's earnings rise comes as it prepares to takeover general insurer Promina Ltd in a friendly merger deal worth 7.9 bln aud. Yesterday Promina reported its full year 2006 profit rose 7.9 pct to a record 544.6 mln aud.

The combined Suncorp/Prominna entity will become Australia's second-biggest car and home insurer, with about 40 pct of the motor insurance market and 35 pct of the home insurance market. The merged group's funds management business will have about 24 bln aud worth of funds under management.

'The merged company will have the scale, product set and distribution capabilities to take advantage of a much greater range of growth opportunities,' Suncorp chief executive John Mulcahy said.

Promina shareholders will vote on the proposal on March 5.

(1 usd = 1.27 aud)

bruce.hextall@xfn.com