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Suncorp HY Profit Surges On One-time Gain

Australia's Suncorp Group Ltd reported that its net profit after tax for the half year to 31 December 2019 increased 156.8% to A$642 million from A$250 million last year. The latest-period results included the A$293 million after-tax profit on sale of Capital SMART and ACM Parts.

But, profit after tax from ongoing functions declined 6.2% to A$396 million from A$422 million in the prior year. The result was impacted by lower reserve releases, an uplift in regulatory project costs, and a contraction in the home lending book.

Group General Insurance underlying insurance trading ratio was 9.3%, impacted primarily by the increase in the natural hazard allowance, an increase in reinsurance costs, and the impact of lower yields and higher regulatory costs.

"We remain confident in the resilience of the Group and we will continue to take a strategic approach to protect the consistency of our earnings through strengthening our core businesses, supported by appropriate risk selection and significantly strengthened reinsurance arrangements," said Steve Johnston Group CEO.

The company targets at least flat unit growth in Australian Consumer Insurance for 2020. It maintains an ordinary dividend payout ratio policy of 60-80% of cash earnings.

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