Australian insurer and bank Suncorp Metway reported full-year earnings ahead of expectations on asset sales and falling bad debt, and said it remained confident about lifting its insurance margins.
Suncorp said on Wednesday its net profit rose to $780 million, its highest level since 2007, from $348 million a year ago. It announced dividend of 20 cents a share.
Suncorp shares bucked the wider market's fall, rising as much as 26 cents, or 3.3 per cent, to $8.04.
Seven analysts on average had expected a net profit of $730 million for the year and a dividend of 18 cents.
Analysts said the focus will be on 2011 targets for insurance margins and bad debts after weather claims and market losses battered Australian insurers. Globally insurers are facing weak stock markets and lower bond yields.
Suncorp said margins from its insurance business, which accounts for nearly three-fourths of its total profit, stood at 9.6 per cent and it was confident of increasing it at least 3 percentage points by 2012.
Suncorp, which last year split its bank into core and non-core after the worst of the global financial crisis, said bad debt charges fell 43 per cent over the previous half and non-core bank's loan portfolio fell by $4.9 billion.
"We stabilised the Group, strengthened its balance sheet and capital position, appointed a new executive team and laid the foundations for sustainable growth by restructuring operations," Chief Executive Patrick Snowball said in a statement.
The sale of the LJ Hooker unit and Suncorp's joint venture interests in RACQ Insurance and RAA Insurance contributed pre-tax profits of $215 million.
Larger rival QBE Insurance last week reported a 39 per cent fall in earnings. Insurance Australia Group reports on tomorrow.
Suncorp shares have fallen 10.5 per cent so far this year almost in line with the broader market.
Reuters