Suncorp has posted a 32 per cent drop in net profit due to losses from its non-core or “bad bank” portfolio.
The banking and insurance group’s 2012/13 financial year net profit of $491 million was down from $724 million in the previous year.
The company owns a range of insurance brands including AAMI, Apia, Just Car Insurance, Shannons, InsureMyRide, Vero, Terri Scheer, Bingle, CIL, Asteron and Tyndall.
Suncorp said its result had been hit by a $632 million after-tax loss from its non-core bank.
It said the after-tax profit from its core businesses rose 19 per cent to $1.23 billion in the year.
The company’s general insurance arm made a net profit of $883 million, up from $493 million, while profit from its core bank was flat at $289 million.
The non-core bank was established in 2009 to set up an $18 billion portfolio in corporate, development finance and property investment loans, separating out bad debts from the banks core, or good, assets.
Suncorp removed the non-core bank from its books in June following the sale of $1.6 billion portfolio of assets.
General insurance gross written premium (GWP) was up eight per cent to $8,589 million; core bank lending rose 9.5 per cent to $47.5 billion; and life risk individual in-Force premium grew 8.7 per cent to $785 million, the company said in a statement on Wednesday.
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Chief executive Patrick Snowball said the year had been a major turning point for the company.
“Everyone at Suncorp is now firmly focused on the future and driving value from our core franchise,” he said in a statement.
Suncorp said it is targeting growth of between seven and nine per cent over the next two years.
The company declared a final dividend of 30 cents, fully-franked, plus a 20 cents fully-franked special distribution.
