Bad Debt Puts More Pressure on Suncorp

 DOUBTS about insurance reserves and bad bank debts linger for Suncorp, although a loan to the struggling MFS-Octaviar group seems safe for now.

The analyst doubts, coming after Suncorp cut full-year profit expectations to $525 million to $550 million last Friday, added to concern about whether losses were recorded on "big bets" on some fixed-income investments.

Shares in the Brisbane-based banking and insurance giant fell another 10c to $11.43 after a 14 per cent pounding on Friday.

Analysts at Credit Suisse thought Suncorp represented "good trading value ... with further downside limited".

UBS slapped on a "sell" recommendation.

Suncorp on Friday unveiled a bad debts cost of $70 million to $75 million, above some expectations.

It stuck by guidance that such costs would be two-thirds that of majors and lending criteria were stringent.

JP Morgan analysts said Suncorp's Queensland construction book seemingly had not deteriorated with "pain" coming from interstate. But they saw latent risks if "asset prices in Queensland continue to fall".

Source: http://www.bloomberg.com/apps/news?pid=20601080&sid=arZKv20X1BXk&refer=asia
http://www.news.com.au/business/story/0,27753,24130582-462,00.html