SUN first glance


Solid result, slightly weaker than expected outlook.

We sold about half our position, given a) a strong run and b) our worry that the ACCC would block the bank sale, which they did.

So, I’m pleased we did that; we’ll see how it trades over the month.

The key bit that the market won’t like, the near term lowing of the forecast margin, due to timing.


The SUN thesis, writ large, I suppose. Massive leverage to rising rates delivered (which is why the share price has been robust, one of the few sectors where it’s an unambiguous benefit).

Pricing power on display. Insurance is not a discretionary product, although even here volume moderation is noticeable. We know discretionary sector (as in retail) volumes are negative system-wide.

CBA was out earlier, also pointing to the slower economic outlook.

The bank, which they’d like to sell, because they understand that banking is a scale game, and that franchise value is no longer a thing, did fine, BDD’s behaved, lending grew…

and the guided NIM is on par with sector pressures (competition, rising deposit rates etc), noting the below (1.85) is the bottom of the guided range.

Hard to see the result impressing.

It’s a good result, but a weaker, slightly messy outlook that’s a bit below consensus, likely to lead to further profit-taking.

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