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SYDNEY Nov 24 Suncorp-Metway Ltd (SUN.AX), Australia's fifth-biggest bank, on Monday joined rivals in flagging a rise in impaired assets and slower loan growth, as the nation's banks feel the impact of a slowing economy.
It wasn't all gloomy as the company, also the country's second-biggest car and home insurer, upped its outlook for annual bank profit growth to the high teens, from high single-digit growth forecast previously.
But investors focused on news it would take a first-quarter impairment loss of A$73 million ($46 million), sending its shares down as much as 6.4 percent.
One month ago, the nation's largest lender, National Australia Bank (NAB) (NAB.AX), reported a quadrupling in bad-debt charges and warned of tough times ahead amid slowing Australian growth and lowered mortgage growth.
Earlier this month, No. 2 lender, Commonwealth Bank of Australia (CBA.AX) warned investors to expect a big jump in bad debts and voiced concern over the economic outlook for at least the next 18 months.
While Australian banks have not been hit as hard as some of their U.S. and European peers, they have started to feel the effects of the slowdown at home and abroad.
Two weeks ago, NAB announced a A$3 billion capital raising, sparking expectations Suncorp and other banks would soon follow.
Suncorp, seeking to reassure investors, said it did not need to raise capital, but was considering reducing its dividends for the current financial year to provide appropriate capital buffers.
The company's cost claims from recent storms would be in excess of A$150 million it said.
Suncorp rival Insurance Australia Group (IAG.AX) said on Monday it expected to pay out between A$60-70 million from claims related to the storms in Queensland state, but remained within its budgeted storm allowance for fiscal 2009. [nSYU005591]
Chief Executive John Mulcahy said the banking business was still up for sale at the right price.
"We are back to sort of normal operating. If someone sees real value in these and is prepared to pay for it, and it's good for our shareholders, the we would consider it," said Mulcahy.
Last month, Suncorp ended talks with unnamed parties regarding a potential sale of its wealth management and banking units. ($1=A$1.58) (Reporting by Mette Fraende; Editing by James Thornhill)