Suncorp has recorded a $913 million net profit, despite an $89 million impairment from its long-suffering attempt to introduce a new Oracle core banking system.
The group’s result, which exceeded CommSec’s expectations of just under $700 million for the 2020 financial year, was also impacted by a 2.3 percent rise in operating expenses to $2.75 billion.
The rise was attributed to higher project and technology costs which led to a $16 million increase in tech spend, as well as $22 million in one-off costs associated with the COVID-19 pandemic.
This included the automation of processes that had been outsourced to India and an adjustment of the technology stack to accommodate the 90 percent of staff who worked from home, up from just 30 percent before the health crisis.
Further improvements in terms of data, automation and digital are slated for the coming year under the recently created technology and transformation function to drive efficiencies and address the growing number of customers using digital channels which increased by 14 percent over the year.
“Digital channels helped drive favourable growth in our Australian motor and home insurance portfolios, and natural hazard costs remained in-line with allowance as a result of our strengthened reinsurance program,” CEO Steve Johnston said in a statement.
“The growing preference for digital and reliance on technology is shifting the way we work and the way we support customers.
“Our teams embraced more agile ways of working to fast-track digital solutions including enhanced webchat capabilities, online claims functionality and virtual claims assessments.”
Suncorp also clarified it had provisioned $60 million to remediate problems with its payroll system that caused issues with pay and leave entitlements; the figure sits at the higher end of the $40-70 million range initially flagged by the institution.
Johnston said that the economic and health challenges of the past financial year will be felt for some time going forward, but the group is still in a strong position to execute on its growth strategies.
“These priorities include improving the performance of our core businesses, improving operational efficiency, leveraging our investments in data and digital and embracing regulatory change.”
The positive result and “modest” dividend of 10 cents per share during the volatile market have contributed to Suncorp’s share price rising 9.32 percent since trading opened on Friday morning.