SUNCORP is tipped to reward shareholders with another special dividend later this year, after posting a strong rebound in profit following lower claims from natural disasters.
In a further step on Suncorp's road to recovery after a turbulent few years, net profit jumped by almost half to $574 million in the six months to December 31. Suncorp also declared a fully franked interim dividend of 25¢ a share, a 25 per cent increase on the previous period.
The financial conglomerate's insurance arm underpinned the result, with a sharp increase in profit margins due to buoyant financial market conditions and lower insurance claims from natural disasters.
While its shares were sold off after it paid out a smaller share of profits than expected, analysts said the company was holding excess capital, some of which it was likely to return to shareholders later this year.
The company now expects to enter the second half of the year with about $1.3 billion more capital than is required by regulators, and analysts expect it to repeat last year's move to top up the final dividend with a special distribution of 15¢ a share.
The prospect of higher dividends comes after the business was battered by massive insurance claims in 2011, while its banking arm had a near-death experience during the global financial crisis.
An analyst at Deutsche Bank, Kieren Chidgey, said the company was unlikely to keep all its surplus capital and he expected a 31¢ final dividend plus a special dividend of 15¢ at the end of the year.
"We continue to see capital management as likely at the [full-year] result," Mr Chidgey said.
Suncorp chief executive Patrick Snowball argued that the business had now reached the end of its turnaround story, pointing to a 58 per cent jump in half-year earnings compared with 2009, when he was appointed to the job.
Mr Snowball acknowledged that Suncorp's interim dividend was lower than some had expected. The payment was 52 per cent of cash profits compared with its intended payout ratio of 60 to 80 per cent of profits, but he said he planned a "healthy" dividend later this year, weather permitting.
"I recognise that the payout ratio is below our full-year target range," Mr Snowball told analysts.
"But as you are by now aware we are always conservative at the half-year, and ex-tropical cyclone Oswald was a reminder of why our interim dividend might still be slightly lower than you'd otherwise expect given the strong operating performance in the first half and also the strong balance sheet."
Suncorp shares fell 0.9 per cent, or 11¢, to $11.56.