Suncorp Sells A$1.6 Billion Loans to Goldman Sachs
(Corrects dividend target payout ratio in fifth paragraph.)
Suncorp Group Ltd. (SUN), an Australian lender and insurer, sold A$1.6 billion ($1.5 billion) of loans to Goldman Sachs Group Inc. (GS) at a discount and said it expects its non-core portfolio to incur a loss in the second half.
The loans were sold at 60 cents for every dollar and the company expects to reduce its non core portfolio by a further A$700 million in the next two months to a remaining total of A$500 million, it said in a statement. Suncorp said it expects the portfolio to lose as much A$490 million in the second half.
Brisbane-based Suncorp has struggled with sour loans largely exposed to the property sector. It set up a non-core bank in 2009 with an A$18 billion portfolio and Chief Executive Officer Patrick Snowball has focused on exiting the loans. By Dec. 31, Suncorp had reduced the portfolio to A$3.4 billion, freeing up A$420 million in capital, according to the statement.
“With the portfolio below A$3 billion, the Group balance sheet in great shape and a general improvement in funding and capital markets now was the time to act,” Snowball said in the statement.
Suncorp said it would consider a dividend above its target payout ratio of 60 to 80 percent of cash earnings for the year to June 30, 2013.
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