Troubled Suncorp home loan lender in the sights of bigger bank

Queensland banking, insurance and investment financial services group Suncorp is losing value quicker than the Zimbabwe currency, so Mr Mortgage said that it must be relieved that another bank actually wants to buy it.
Suncorp said today it has had several approaches by parties interested in buying its banking and funds management operations.

Speculation has been rife in financial markets that Suncorp would become a takeover target because of a need to recapitalise its balance sheet in the face of a global financial crisis.

Commonwealth Bank of Australia has been rumoured as one bank interested in the banking division.

Last week, Suncorp chief executive John Mulcahy said he thought the bank’s change in business model would help reduce the complexity structure and bring down costs of the bank.

Mr Mulcahy said that the bank was well-positioned but would require extensive capital raising to fund its balance sheet in the year ahead.
“Suncorp will require around $4 billion of funding to meet its needs over the next year,” he said. “We’re well on track to secure that with over $1.1 billion in private placements completed since June.”

About: Rick Adlam: Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers. Website: http://www.mrmortgage.com.au