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Suncorp Says Profit Declines Up to 34% on Loans Portfolio Losses

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July 31 (Bloomberg) -- Suncorp Group Ltd., an Australian lender and insurer, said profit fell as much as 34 percent in the year ended June, more than analyst estimates after losses on its non-core loans portfolio.

The company estimates a full-year profit of A$480 million ($432 million) to A$500 million, compared with A$724 million a year earlier, according to a statement today. That is lower than the A$586 million mean forecast of 10 analysts surveyed by Bloomberg.

Chief Executive Officer Patrick Snowball has focused on exiting commercial property, corporate loans, and leases that were worth A$18 billion in 2009 to reduce risk and steer Suncorp toward insurance and personal and small business lending. The unit that housed the sour loan portfolio is expected to post a full-year loss of A$630 million, it said in the statement.

The board intends to declare a special dividend of 20 cents a share, in addition to a 30 cent payout, bringing the total for the year to 75 cents, it said in a stock exchange filing.

The Brisbane-based company received A$940 million from Goldman Sachs Group Inc. for the sale of a portfolio that includes mostly bad loans, which it sold at 60 cents for every dollar. Suncorp said June 13, the non-core portfolio had shrunk to A$2.8 billion as at May 2013.

To contact the reporter on this story: Narayanan Somasundaram in Sydney at nsomasundara@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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