Suncorp-Metway Ltd
(ASX:SUN) has reported a sharp rise in impairment charges at its core banking division during the three months to March 31.
The group booked a $20 million impairment loss for the March quarter in core banking, which includes personal, retail and small-to-medium-sized enterprise banking.
The company says the increase is mainly due to a jump in mortgage arrears, prompted by higher interest rates and the withdrawal of government stimulus payments.
But Suncorp Bank CEO David Foster says the bank’s mortgage book remains in excellent shape and has stabilized in April.
Mr Foster says that while the bad debt charge for the third quarter had increased, the year to date charge on an underlying basis remains low at 23 basis points of credit risk weighted assets.
For the 12 months to June 30, 2009, Suncorp-Metway posted a profit of $348 million.
