Suncorp Says Profit Declines Up to 34% on Loans Portfolio Losses
Suncorp Group Ltd. (SUN), 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. (GS) 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.
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