Suncorp is set to give $600 million to its shareholders after completing the sale of its Australian life insurance business.
The Brisbane-based bank wrote to shareholders this morning informing them Suncorp will sell the business for approximately $725 million to TAL Dai-ichi Life Australia Pty Ltd.
Once separation and transaction costs are removed, as well as provisions and hybrid capital, Suncorp will return the remaining $600 million to shareholders following the completion of the transaction by the end of 2018.
READ MORE:Â World’s top 10 richest tech billionaires
READ MORE:Â Australia’s richest tradies revealed
Under the share sale with TAL, life insurance will still be offered through Suncorp’s Australian distribution channels and store network. No impact will be had upon Suncorp’s life insurance business in New Zealand.
TAL Life Australia currently insures almost four million Australians, and is owned by Japanese group Dai-ichi Life Holdings Inc.
Dai-ichi Life is one of the world’s largest publicly traded life insurance groups with a current market capitalisation of $31.5 billion. Dai-ichi Life’s total assets are worth $607.9 billion.
Suncorp Group, which currently boasts a market capitalisation of $20.05 billion, is a top 20 ASX-listed business employing approximately 13,300 people and serving over nine million customers across Australia and New Zealand.
The bank came under criticism on Friday last week after it Â followed Westpac by hiking up interest rates on its variable home and small business loans, citing increased funding costs.
The hikes, which take effect from September 14, will see all variable rate home loans increase by 17 basis point (0.17 percent per annum) while small business loans will increase by 10 basis points (0.10 percent per annum).
It was the second time Suncorp bumped up its variable interest rates in less than six months.
“We acknowledge that any increase to rates will impact our home loan customersâ cost of living, however our savings customers, many of whom are retirees, have been supported by favourable deposit rates over recent months,” said the bank’s Banking and Wealth CEO David Carter.
“Weâre committed to reviewing home loan rates, should there be a sustained improvement in funding costs.” Source: https://finance.nine.com.au/2018/09/04/11/08/suncorp-to-hand-600-million-to-shareholders-after-sale-of-life-insurance-business