SUNCORP-METWAY has followed its rival, Insurance Australia Group, in upgrading its profit forecast for its forthcoming half-year because of fewer bad weather-related payouts and calmer investment markets.
While Suncorp is likely to face a rush of claims over storms in Queensland and northern NSW in recent days, these are likely to be contained within the company's current allowance for catastrophic events and should not disrupt its new earnings expectations.
The banking and insurance group now expects earnings of $355-375 million for the six months to December 31 - as much as $25 million, or 7 per cent, above the market consensus of $350 million.
Such an amount would also be 45 per cent higher than the group's last half-year profit of $258 million, which was depressed by huge payouts on storm, flood and bushfire claims, as well as increasing bad debts run up by its banking division.
Suncorp is due to release its interim results on February 24.
Despite the upgrade, the financial services giant suffered a blow to its executive ranks after long-serving funds management boss Brett Himbury resigned to take up the chief executive role of the giant Industry Funds Management. For the past four years, Mr Himbury has been the head of Tyndall Investment Management, the merged funds management business of Suncorp.
While the group is seeing some improvements within its banking business after its lending book was split into ''good'' and ''bad'' loans, it is Suncorp's insurance brands of AAMI, GIO and Vero that have driven this year's interim profit gains.
''The improved result is primarily due to a strong contribution from the general insurance business which has benefited from more favourable weather conditions and enhanced returns from the investment portfolios,'' the company said in a statement to the ASX yesterday.
