Suncorp Building

Suncorp sells bank with intentions to focus on insurance sector

Suncorp has recently announced the $4.9 billion sale of its banking operations, with the hopes that this will simplify the business, and allow it to focus its attention on insurance in Australia and New Zealand. 

ANZ will purchase the regional bank in a cash deal expected to close in the second half of 2023, subject to regulatory clearances. 

Suncorp Group CEO Steve Johnston says the transaction won’t change the insurance strategy, but it will strengthen the company’s focus as it continues to drive the performance of its brand portfolio. 

“Strategically we feel it is an opportunity for us to really focus exclusively on our insurance business and drive the sort of performance we think we can deliver in that business,” Mr Johnston said. 

Suncorp estimates net proceeds of $4.1 billion from the deal, and say that “consistent with the approach taken in previous divestments”, the current intention is to return the majority of that to shareholders.

Chairman Christine McLoughlin says both businesses will benefit from a singular focus on their growth strategies and investment requirements. 

The company’s brands include AAMI, GIO, Suncorp, Shannons, Apia and Vero. In New Zealand, it also has the AA insurance joint venture and Asteron Life.

“Our purpose of building futures and protecting what matters – the focus of our company for over 100 years – will remain at our core and enable our people to deliver on our vision to create the leading Trans-Tasman insurance company,” she said. 

Mr Johnston says Suncorp has momentum in its motor portfolio and he expects the home portfolio to ultimately recover some lost market share after the company shifts pricing to reflect increasing costs. 

“I go into this transaction with a very comfortable disposition around the performance of our insurance business,” he said. 

Both Suncorp and ANZ have made commitments to the state of Queensland as part of the transaction. 

Suncorp’s commitment includes establishing a Disaster Response Centre of Excellence, which will incorporate modern technology to monitor, prepare for and respond to extreme weather events and natural disasters. 

This centre will also include an employment hub for the firm’s flexible event workforce. 

Mr Johnston says the company has recruited more than 1000 new employees over the past six weeks to manage the east coast flooding, with a large majority of the new staff in Queensland.