Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MMatters Team, Read your view on Insurers today - In regards to SUN - I hold SUN - "Can you clarify the situation with ANZ wanting to purchase the Banking business " A 12 month timeframe was given - ie July 2023" - Would you to hold until transaction is completed to benefit from the sale? "Excess capital is expected to be returned through combination of pro rata capital return, fully franked special dividend and buybacks" regards Deb
Hi Debra,
Ultimately we like the deal with SUN’s bank being a good fit for ANZ, it gives them more scale which is really important for them considering they are the smallest of the big 4. That said, we would be treating ANZ as if a normal bank holding and tweaking accordingly, the SUN transaction will not change that. i.e. for ANZ we think new highs are a strong chance into Christmas and as is the case with our CBA position, we may trim into that strength.
Suncorp (SUN) on the other hand should continue to get re-rated to an insurance multiple. i.e. SUN trades on 12.5x forward while IAG trades on 14.5x.
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