Another finance titan takes a hit
INSURANCE and banking heavyweight Suncorp will take a hit of more than $130 million due to the coronavirus pandemic — and it now also faces a bill of up to $70 million from underpaying staff.
As well, the head of the group’s banking and wealth management operations is departing after less than four months, citing the challenges of commuting interstate.
In a trading update yesterday, Suncorp said coronavirus would have various effects across its businesses, which include insurance brands AAMI and GIO.
It has set aside $133 million in its namesake banking business to help cover the financial fallout.
Suncorp management said it based that provision on a scenario that included a rise in unemployment, a fall in housing and commercial property prices, and “sharp deterioration” then slow recovery in gross domestic product.
Chief executive Steve Johnston said the group had “already received thousands of requests for financial hardship (assistance) from both our bank and insurance customers”.
It had provided discounts and premium waivers to 12,300 insurance customers in Australia and New Zealand,
and deferred repayments on more than $4 billion worth of loans.
Suncorp also revealed it was among the growing number of Australian companies to have paid its staff too little.
The group said it started an internal review of pay and leave practices in November, and a preliminary analysis had found “inconsistencies” in rostering and pay systems.
Those inconsistencies “may have led to errors in payments of overtime, shift penalties and public holiday loadings”, the company said.
Suncorp said that while there were “potential instances” of both underpayments and overpayments, it expected a bill of $40 million to $70 million to compensate staff eligible for extra payments and to fix its payment processes.
“As a Suncorp employee of long standing I am incredibly disappointed that we have let our people down,” Mr Johnston said.
“There is no excuse and we need to get this right.
“I want to offer my sincere apologies to those who may have been affected.”
Over the past year, a host of big-name corporate entities — including Woolworths, Rebel Sport owner Super Retail Group and jeweller Michael Hill International — have revealed they underpaid staff.