Suncorp Quashes Demerger Speculation
Bancassurance Group Suncorp Metway quashed speculation that it was considering divesting or de merging any of its businesses and said it fully intends to keep its struggling banking divisions as part of the group.
“Our new CEO will be one that has three businesses,” Suncorp chairman John Story said of the insurance, banking and wealth management group.
Last week Suncorp made public the decision that chief executive John Mulcahy’s departure had been moved forward and Mr. Mulcahy would receive $2 million in severance. Mr Mulcahy’s interim replacement, chief financial officer Chris Skilton, will also leave once replacements are found.
Suncorp also publicized its strategy to retreat from some big banking markets and raise home insurance premiums as it suffers from rising hazard claims.
Rising bad debts at Suncorp’s banking unit drove half year profits to drop by a third. Suncorp also had to absorb insurance claims from the Victorian bush fires, and storms in Queensland. The bank also continues to have funding problems, despite the sovereign guarantee.
Suncorp’s banking unit was put up for sale late last year as the banking crisis reached fever pitch and funding was simply impossible to obtain. ANZ put forward a bid which Suncorp dismissed as too low just after the government guarantee was announced.
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