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Is the sun setting on Suncorp?

Suncorp is warning that profits will fall in its banking arm during the 2010 financial year, but will this mean that its bank will be put up for sale?

The firm has also bought forward the departure of its CEO John Mulcahy as it struggles to ride out the credit crunch. Investors are worried about its exposure to development finance.

And outgoing chief financial officer Chris Skilton has admitted that Suncorp will suffer in the same way as other regional banks whose interest margins have shrunk due to higher funding costs.

Does Suncorp now look silly to have spurned ANZ’s offer for its banking unit last October? Is a sale now inevitable? Let us know below.

Comments (5)

  1. Suncorp’s underlying performance is likely to get weaker – not better – over the next year. It will struggle with its commercial loans. It should have taken the ANZ offer – now the sale price might be less than last year. Missed opportunity there

  2. The property market is not a good place to be at the moment – and Suncorp has too much exposure.

  3. It’s not all bad news – insurance, wealth management, even banking are all turning a profit.

  4. Suncorp’s banking arm does not have the balance sheet to compete with the big four and quickly loosing market relevance. Not only is the sun setting, it’s almost midnight!

  5. In my view, Suncorp is undervalued relative to its peers. The whole market cap is around 5 to 6 billion. The insurance arm is earning the same amount money as IAG and IAG market cap is about the same. This means market is assigning zero value to its banking arm and wealth management arm.

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