Suncorp Unveils AUD 3.00 Cash Return of Capital Backed by Key Approvals

Suncorp’s Capital Return Initiative

Suncorp Group Limited (ASX: SUN) has formally announced a cash return of capital amounting to AUD 3.00 per ordinary fully paid share. This move follows the bank’s strategic decision to return value to shareholders, funded by the net proceeds from the sale of Suncorp Bank. The announcement, lodged on 12 February 2025, outlines a clear timetable and confirms all necessary approvals have been obtained.

Regulatory and Shareholder Approvals

The cash return of capital has received the green light from multiple regulatory bodies and shareholders. Notably, shareholder approval was secured at the 2024 Annual General Meeting held on 22 October 2024. The Australian Prudential Regulation Authority (APRA) has also granted approval for the capital reduction, a critical regulatory step for a financial institution. Additionally, Suncorp has obtained a draft class ruling from the Australian Taxation Office (ATO) dated 30 January 2025, with a final ruling expected post-payment.

Timetable and Execution

The key dates for the capital return are firmly set. The effective date is 13 February 2025, with the last day for trading shares cum the return of capital on 14 February 2025. The record date, which determines entitlement to the cash payment, is 18 February 2025. Trading on an ex-return of capital basis will commence on 17 February 2025. The payment date for the cash return is scheduled for 5 March 2025, marking the day shareholders will receive their AUD 3.00 per share distribution.

Implications for Shareholders and Market

This return of capital represents a significant cash distribution to shareholders, reflecting Suncorp’s confidence in its capital position following the divestment of its banking arm. While the cash return is not a dividend, shareholders should consider the tax implications, particularly in light of the pending final ATO class ruling. The return of capital will reduce the company’s equity base, potentially impacting future capital management strategies and share price dynamics.

Looking Ahead

Investors will be watching closely as the payment date approaches, assessing the impact on Suncorp’s share price and overall capital structure. The company’s ability to execute this return smoothly, alongside forthcoming tax rulings, will be pivotal in shaping market sentiment. This capital return initiative underscores Suncorp’s ongoing transformation and focus on shareholder value.