Suncorp Metway Ltd John Mulcahy, Chief Executive Officer UBS Global Financial Services Conference 12 May 2008
Agenda Overview of Suncorp Key numbers Key challenges Summary
Suncorp at a glance Group total assets in excess of A$91bn Approximately 8m customers Australia s 3 rd largest P&C insurer with GWP of over A$3bn in H1 07/08 Australia s 6 th largest listed bank with assets of A$69.3bn Wealth Management business with FUM of over A$27bn Over 16,000 staff in 450 offices across Australia and New Zealand Sound capital position Dividend A$0.52 cents per share* Statistics based on pro-forma view of combined Suncorp and Promina businesses 3 * Fully franked
Value Suncorp the history 1 2 3 Integration Organic growth Corporate Development 3 Promina 1 2 1 2 3 Suncorp 2 1 Metway QIDC 1996 2001 2007 4
Suncorp at a glance A$ (m) 2,500 Profit before tax 2,000 1,500 Merger with Promina 100% 90% 80% 70% 60% 8% 6% 7% 49% 55% 54% 20% 20% 28% 50% 54% 1,000 40% 500 30% 20% 39% 38% 40% 50% 10% 25% 0 2003-2004* 2004-2005 2005-2006 2006-2007** 2007-2008 0% 2003-2004* 2004-2005 2005-2006 2006-2007** 2007-2008 1H 2H BANKING PROPERTY & CASUALTY WEALTH MANAGEMENT LJ HOOKER & OTHER * Australian GAAP ** Pro-forma Suncorp & Promina Merger with Promina
Mar-1995 Feb-1996 Jan-1997 Dec-1997 Nov-1998 Oct-1999 Sep-2000 Aug-2001 Jul-2002 Jun-2003 May-2004 Apr-2005 Mar-2006 Feb-2007 Robust and stable economic environment... 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% GDP (A$m) Aust, ex QLD: Pop'n Growth (%) QLD: Pop'n Growth (%) 270000 250000 230000 210000 190000 170000 150000 Banking Well structured and stable industry Regional banks offsetting Big 4 domination Competition intensifying Industry passing higher funding costs through to customers Wealth Management Fragmented market Under-insured aging population Double digit industry growth in life insurance and funds management Source: ABS... with well structured industries 6
Robust and stable economic environment... Personal lines market share* (%) Property & Casualty Commercial lines market share* (%) Industry consolidation One of the worst large claims years on record Premium increases in personal lines Evidence of hardening in commercial lines premiums Mark-to-market impact on reported margins * Source: Credit Suisse Research... with well structured industries 7
Half Year Result to 31 December 2007** Banking P&C Wealth Management PBT and Bad Debts $323m (+9.9%) Net interest income $484m (+6.6%) Cost to income ratio 43.1% (-1.3%) Gross loans $50.3bn (+20.4%) PBT $172m (-75.4%) Net earned premium $2.9bn (+3.0%) Major claims events $280m (Dec 06 $55m) IT Ratio 5.1% (Dec 06 17.0%) Underlying profit after tax* $85m (+9.0%) Life Risk annual premium $675m (+15.4%) Life Risk new business $55m (+22.2%) Investment Sales $661m (+40.6%) NPL s as % of gross loans 0.70% (Dec 06, 0.64%) Personal lines GWP $2.1bn (+4.0%) FUM $27.1bn (+3.5%) * Excludes investment income on shareholder assets ** All numbers in A$ 8
Suncorp FY08 guidance Banking growth in profit before tax and bad debts 10% - 12% P&C ITR inc. A$90m integration benefits 9% - 12% Wealth management underlying profit growth >10% Dividend nominal growth 9
Key challenges Delivery of integration benefits Navigation of global credit and funding crisis Securing capital position
Successful delivery of integration benefits PHASE 1: Settling in PHASE 2: Design PHASE 3: Implementation March July 2007 Develop business model Quick wins of A$55m annualised savings July November 2007 Integration initiatives identified Revised benefits & costs of merger December 2007 onward Implementation of over 300 initiatives Framework to keep the market updated is established Improved transaction economics A$m 400 350 300 250 200 150 100 50 0 325 +44% 225 Synergy Benefits Pre-merger target +6% 355 Implementation costs New target 375 400 300 200 100 0 (100) (200) Integration benefits over time 293 325 223 275 317 102 111 (177) (112) (18) (8) (60) (75) 2006/07 2007/08 2008/09 2009/10 2010/11 One-off implementation costs Ongoing benefit Net P&L impact* * Pre-tax
Navigation of global credit and funding crisis UNITED STATES Commercial Paper EUROPE ECP Senior Debt - Benchmark Issuance Sub-debt Bank & Insurer Securitisation ASIA ECP Senior Debt Sub-debt Securitisation AUSTRALIA Deposits NCD s Bank Bills Senior Debt Sub-debt Capital Securitisation Wide variety of domestic funding options Strong alliances with a diverse group of international investors 19 12
While impaired assets have increased Impaired Assets as a % of Risk Weighted Assets 1.00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% FY01 FY02 FY03 FY04 FY05 FY06 FY07 Key: ANZ CBA NAB WBC SGB Majors SUN *Actual and Estimated figures from Macquarie Research 11
... credit quality will continue to limit write-offs Bad and Doubtful Debt Expense/Risk Weighted Assets* 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% Key: ANZ CBA NAB WBC SGB Majors SUN 0.00% FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08E FY09E FY10E *Actual and Estimated figures from Macquarie Research 12
Securing the capital position 30 Jun 2007 Reported 31 Dec 2007 Updated 31 Dec 2007 Target Bank Capital Adequacy Ratio 9.86% 10.84% 11.88% 10.0%-10.5% Bank Adjusted Common Equity P&C Minimum Capital Requirement Ratio 5.05% 4.54% 4.68% 4.5%-5.0% 2.02x 1.99x 2.07x 1.53x Updated 31 Dec 2007 calculation includes the impact of the 65% underwriting of the dividend reinvestment plan and the anticipated $325m raising from Tier 1 Hybrid. 17
Summary Underlying business very strong Top-line growth following weather events Diverse and secure funding base Further securing capital base Placed to capitalise on integration 17
Questions?
Disclaimer This report contains general information which is current as at 12 May 2008. It is not a recommendation or advice in relation to Suncorp-Metway Limited or any product or service offered by the Suncorp Group. This report should be read in conjunction with all other information concerning Suncorp-Metway Limited filed with the Australian Stock Exchange. Any statements made concerning future performance, earnings or financial position are indicative only, based on current information. Future performance can be affected by various risks, unknown factors and matters beyond the control of the Suncorp Group.
Investor Relations Contacts Steve Johnston steve.johnston@suncorp.com.au Tel: +61 (0)7 3835 5281 Buy-side enquiries Nicole Marques nicole.marques@suncorp.com.au Tel: +61 (0)7 3836 1960 Sell-side enquiries Mark Ley mark.ley@suncorp.com.au Tel: +61 (0)7 3835 5639 www.suncorp.com.au