Suncorp Metway has warned annual earnings will fall by as much as 39per cent as its banking division wears about $700million in bad debts and investments after its insurance and wealth management groups were hit by volatile markets.
In a trading update yesterday, Suncorp said expected net profit for the 12 months ending June 30 would be between $340million and $360million, compared with $556million in 2007-08.
Profit also will be dragged down by costs associated with the takeover in early 2007 of insurer Promina, with pre-tax profit before Promina acquisition items between $790million and $810million. Cash profit may be as high as $530million.
A spokesman for Suncorp said, ''Volatile investment markets have reduced underlying profits in Suncorp Life and resulted in lower returns in the general insurance investment portfolios.
''The bank continued to be impacted by ongoing deterioration in the global and domestic economy, resulting in increases in impaired assets and reduced property valuations.''
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