By Ross Kelly
SYDNEY--Suncorp Group Ltd. (SUN.AU) said Thursday that it sold a
large chunk of loans from its so-called bad bank to Goldman Sachs
Group Inc. (GS) for about 960 million Australian dollars (US$909
million).
The U.S. investment bank is buying a A$1.6 billion book of
Suncorp loans, for which it has paid an average of 60 cents in the
dollar. Brisbane-based Suncorp set up the non-core bank in 2009 to
house A$17.5 billion of mainly commercial real-estate loans that
could no longer be funded due to the global credit crunch.
Suncorp last month predicted the portfolio of non-performing
loans would fall below A$2.7 billion by June, making it easier to
sell.
The company said Thursday that it expected a further A$700
million of the loans to be cleared in June and July due to
repayments, or the sale of some individual ones. The remaining
A$500 million worth of loans would be moved back into the main
bank, it said.
The elimination of the entire bad bank portfolio would lead
Suncorp to incur a net loss of between A$470 million and A$490
million in the second half of its current fiscal year to the end of
June, the company said.
A Sydney-based spokeswoman for Goldman Sachs wasn't immediately
available to comment.
Write to Ross Kelly at ross.kelly@wsj.com
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