Insurance and banking firm Suncorp has forecast continued strength in its wealth management business after its overall first-half profit fell due to weather claims.
Brisbane-based Suncorp yesterday reported wealth management profit was up by 9 per cent to $85 million for the last six months of 2007.
Funds under management (FUM) rose by 67.9 per cent to $27.1 billion due to last year’s superannuation changes and external mandates.
The company has forecast its wealth management division will expand by more than 10 per cent in 2008 because of strong FUM growth, higher sales and customer retention.
Overall profit of Australia’s sixth-biggest bank fell 27.5 per cent to $382 million. But growth for 2008 is forecast to grow by 10 per cent to 12 per cent, Suncorp’s result said.
Severe weather caused the company to report $172 million in insurance profits, down 75 per cent from the previous corresponding period.
Last year, Suncorp told investors that profits would be cut by Sydney’s December hail storms by around $150 million.
Flash flooding in the central coast area and Lismore in New South Wales and bad weather in New Zealand also cost the firm.
Despite the global credit crunch costing the firm’s banking division $8 million, profit was up 4.4 per cent to $307 million.
Suncorp is expecting annual savings with insurance firm Promina, which it acquired last March, to be $325 million. This is $100 million more than its previous forecast.
The company maintained a dividend of 52c and its shares fell $1.22, or 7.86 per cent to $14.31 yesterday.
