The second-tier bank’s CEO believes that risk management improvements will see it become the “only credible alternative to the major banks”.
Making his report to shareholders at Suncorp’s AGM, Patrick Snowball highlighted the role that risk management will play in bringing the business back from the brink and making it a serious contender.
He noted that Suncorp planned to enhance its risk management under the Basel Advanced Accreditation program, “underscoring our Bank’s positioning as the only credible alternative to the major banks”.
Other key issues on Suncorp’s agenda included:
making policy systems more efficient;
further simplifying general insurance licences through consolidation;
ensuring its people are able to focus on high-value work by using business partners for transactional activities.
Snowball added that, in spite of all the natural and economic challenges the group has faced, it was proud of the fact that it had, over the past three years:
paid out $1.6bn in ordinary and special dividends to shareholders;
paid back over $1bn in debt thereby significantly reducing the gearing levels of our balance sheet; and
also increased the market capitalisation of the company by more than $2.5bn.
“For the last financial year, we recorded profit after tax of $724 million, up 60 per cent, while profit from business lines increased by 23 per cent. And at the same time we have built the capital and operational foundation that will serve us well in the future,” said Snowball.
He did concede, however, that for many reasons outside of Suncorp’s control, it had to “impose significant premium increases on many of our policyholders”.
“It’s a fact that globally, the cost of insurance has increased for both consumers and insurers. This is a factor of the environment – natural and economic – in recent years,” he added.
Stronger, more secure
Suncorp Chairman Dr Ziggy Switkowski added that the group had strengthened on the back of risk management initiatives imposed in the wake of the GFC.
“The Global Financial Crisis of 2008 highlighted the risks of Suncorp Bank's dependence upon wholesale funding from offshore and our overexposure to property development projects particularly in New South Wales and Queensland,” he said.
“As a result, major changes have been made to our risk management processes and lending practices.
“The industry regulator, APRA, has been closely and constructively involved and today's Suncorp is a better structured, more secure and confident financial services company as a result.”
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