Suncorp Group (ASX:SUN) saw its net profit fall 41.9% in FY11 to $453 million, as a result of increased payout costs associated with natural disasters including the Queensland floods.
The finance and insurance company said it managed over 100,000 flood, cyclone, earthquake and other natural hazard claims during the year, worth an estimated gross cost of $4 billion.
As a result, Suncorp's general insurance business reported hazard claims that were $325 million above expectations. Post-tax profit from the segment fell to $392 million, from $557 million a year earlier.
Suncorp Bank also made the decision to include a $25 million provision for additional impaired loans arising from the floods, but said actual losses have to date been immaterial.
The company recorded profit from its core bank of $259 million, down from $268 million a year ago.
Its non-core bank incurred a loss of $175 million, but this was down from the $224 million loss from FY10.
The profit contribution from personal insurance division Suncorp Life also fell to $149 million from $222 million, due to higher than expected claims.
Despite the declines, the Suncorp board maintained the full-year dividend payout at 35 cents, in what it said was an expression of confidence in the underlying business.
But Suncorp scrapped plans for a capital return program. Chairman John Story said the board had “decided to retain the full amount of our surplus capital as a further protection against sort term uncertainty and volatility.”
SUN shares grew 5.56% in Wednesday's trading to $7.590.