Suncorp Sells Loan Book to Goldman Sachs for A$960 Million

   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 [e-mail]

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