Suncorp says the $4.9 billion sale of its banking operations will simplify the business and allow it to centre its attention on driving improved performances from its Australia and New Zealand general insurance operations.

As reported in a Breaking News earlier today, ANZ will purchase the regional bank in a cash deal expected to close in the second half of next calendar year subject to regulatory clearances.

Group CEO Steve Johnston says the transaction won’t change the insurance strategy, but will strengthen the company’s focus as it continues to drive the performance of its brand portfolio and to move ahead with a digitisation program of work.

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

Suncorp, which estimates net proceeds of $4.1 billion from the deal, says 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 and the agreed price fairly values the bank.

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.

Suncorp, which will release its financial results on August 8, reconfirmed its commitment to its previously announced targets for the current financial year.

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 shifted 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 Brisbane-headquartered Suncorp and Melbourne-based 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, incorporating latest technology to monitor, prepare for and respond to extreme weather and natural disasters. The centre will include an employment hub for the firm’s flexible event workforce.

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

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