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SUNCORP Group (ASX: SUN) shares have taken a battering after its full year results showed a profit of $1.075 billion, which was below some analysts' expectations.
The lender and insurance giant's net profit rose by 3.6 percent, while Deutsche Bank forecast it would hit five per cent.
The Brisbane-based company will pay a final dividend of 40 cents a share for a full year dividend of 73 cents which is up from the previous year's 68 cents.
Chairman Dr Ziggy Switkowski says these results reflect Suncorp's solid corporate strategy over FY17.
"The final dividend reflects momentum in growth driven by Suncorp's refined strategy and focus on the customer," says Switowski.
The group performed particularly well in Australia, but was let down by New Zealand where business suffered from the Kaikoura earthquake and additional claims from the 2010/11 Cantebury earthquake.
The Australian side of the business scored Suncorp a net profit of $723 million up 30 per cent from FY16, whilst New Zealand profits dropped over $100 million from FY16 to $82 million.
The company's banking and wealth business made a profit of $400 million, down $18 million from FY16, reflecting investments made to support the core platforms.
Going into FY18 the group has already made two significant investments. The purchase of a $300 million reinsurance program will see the broker protect itself from natural hazards and catastrophes.
A further investment of $100 million into the group's 'marketplace' strategy has been made to focus specifically on gaining and retaining customers.
The marketplace strategy investment will contribute to the creation of a new Suncorp Marketplace app, refresh the Suncorp brand, and accelerate the creation of third-party partnerships into the marketplace to build new services and solutions for customers.
Suncorp CEO & Managing Director Michael Cameron (pictured) says the company hopes the investment will allow the company to better meet the needs of customers.
"Our vision to be the destination for the moments that matter focuses on services being bought to better meet the needs of our customers, not products sold to meet those targets," says Cameron.
Looking to the future, the company hopes to increase the payout for investments again in FY18 and once again boost profits in the company.
At around midday (AEST) Suncorp shares were down by more than six per cent to $13.56.
Business News Australia
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