THE private health insurer NIB will consider in coming months returning a significant amount of surplus capital now sitting on its ''lazy'' balance sheet if it fails to find a suitable acquisition.
With no debt and $130 million of spare cash available, the country's only listed health fund is still looking to buy another member-owned insurer in order to bulk up against the industry leaders, Medibank Private and BUPA/MBF.
But having been outbid in the two most recent sales, Australian Wealth Management and Manchester Unity, NIB is insistent it will not pay over the odds for any acquisition. It may, instead, hand part of its war chest back to shareholders if the right deal cannot be done.
That would follow yesterday's declaration of a yearly dividend of 7.4c a share - 4.4c at the final stage - of which only a third has been funded out of its annual net profit of $23.8 million. The profit fell nearly 11 per cent because of an income loss on its investment portfolio.
The rest of the distribution, a fully franked dividend of 5c a share, was made up of a tax-effective capital return that, under normal circumstances, would have accounted for all of its net earnings.
It has forecast pre-tax earnings from insurance of between $45 million and $50 million this financial year, which represents a slightly higher underwriting margin of 5.5 per cent.
