In a trading statement, the listed company, which covers activities including insurance and banking, said its underlying profit for the 12-month period to 30 June is expected to be between $130 million and $135 million, compared with a proforma after tax result of $150 million a year before.

The downgrading of the wealth management division profit came at the same time as Suncorp said its unaudited, preliminary financial net profit after tax was now expected to be between $525 million and $550 million, inclusive of the impact of acquisitions.

Suncorp chief executive John Mulcahy said the main cause of this disappointing result was negative investment markets impacting on funds under administration, funds under management and the value of the assets backing the annuity book. He said New Zealand investment and superannuation returns had also been hit by market developments

Mr Mulcahy said he expected that wealth management conditions would remain challenging, with the group forecasting a flat underlying profit result compared to 2007-08.