Suncorp Announces AUD 0.63 Total Dividend With APRA Greenlight for Capital Return
Suncorp Group Limited has announced a combined ordinary and special dividend totaling AUD 0.63 per security, fully franked and backed by APRA approval for a capital reduction. The payment is scheduled for mid-March 2025.
- Total dividend of AUD 0.63 per security announced
- Ordinary dividend of AUD 0.41 and special dividend of AUD 0.22
- Dividends fully franked at 30% corporate tax rate
- Record date set for 18 February 2025; payment date 14 March 2025
- APRA approval granted for capital reduction; draft ATO class ruling obtained
Dividend Announcement Overview
Suncorp Group Limited (ASX: SUN), a major player in the Australian financial services and insurance sector, has confirmed a dividend distribution comprising an ordinary dividend of AUD 0.41 per fully paid ordinary share and a special dividend of AUD 0.22 per share. This brings the total dividend payout to AUD 0.63 per security, fully franked at the prevailing corporate tax rate of 30%.
The record date for shareholders eligible to receive this dividend is set for 18 February 2025, with the ex-dividend date on 17 February 2025. The payment date is scheduled for 14 March 2025, providing investors a clear timeline for dividend receipt.
Regulatory Approvals and Tax Considerations
Significantly, the Australian Prudential Regulation Authority (APRA) has granted approval for a capital reduction, a key enabler for the special dividend component. This regulatory nod underscores Suncorp's compliance with prudential standards while returning capital to shareholders.
Additionally, Suncorp has secured a draft class ruling from the Australian Taxation Office (ATO) dated 30 January 2025 related to the capital initiative. While this ruling is preliminary, a final determination is expected post the dividend payments, which may influence the tax treatment of these distributions.
Dividend Reinvestment Plan and Currency Options
Suncorp continues to offer a Dividend Reinvestment Plan (DRP) for this dividend, allowing shareholders to reinvest their dividends into additional shares rather than receiving cash. This plan is active and applicable for the current dividend, providing flexibility for investors seeking to compound their holdings.
Regarding currency arrangements, dividends will be paid in Australian dollars by default. However, shareholders who have nominated New Zealand bank accounts will receive payments in New Zealand dollars, with exchange rates set by the Reserve Bank of Australia as of 18 February 2025. Shareholders can elect to change their payment currency by notifying the share registry by the record date.
Implications for Investors and Market Outlook
The combined ordinary and special dividend reflects Suncorp's robust capital position and confidence in its earnings outlook. The full franking credits enhance the attractiveness of the dividend, particularly for Australian tax residents seeking tax-effective income.
Investors should note the pending final ATO class ruling, which could have implications for future capital returns and dividend structuring. Meanwhile, the APRA approval signals regulatory support for Suncorp's capital management strategy.
Bottom Line?
Suncorp’s fully franked AUD 0.63 dividend, supported by regulatory approvals, sets a positive tone ahead of the March payment date.
Questions in the middle?
- What impact will the final ATO class ruling have on future dividend policies?
- How will Suncorp’s capital reduction strategy influence its balance sheet and growth plans?
- Will the Dividend Reinvestment Plan uptake affect Suncorp’s share liquidity or price dynamics?
