Reaction to Suncorp’s full-year results, announced last week, has ranged from disappointment at the profit result to cautious relief that its banking operations are haemorrhaging less.

Net profit for the bancassurer dropped 40% to $348 million in the 12 months to June 30 compared with a year earlier.

It was squeezed by a $710 million impairment charge for bank bad debts and its general insurance arm suffering natural catastrophe losses to the tune of $255 million.

JP Morgan analyst Siddarth Parameswaran says it appears the group is getting some control over the bad debts in the bank.

“The bottom seems to be there,” he told insuranceNEWS.com.au.

However, Morningstar analyst David Walker says the bank’s bad debt charge of $710 million is the feature number in the whole result.

“That in itself is nearly as large as the entire group’s profit in recent years – a staggering situation,” he said. “The bank’s problem with uncompetitive funding costs is not going to go away. Even though the GFC is over, they’re still saying they can’t compete with the majors because they are only A-rated.”

Mr Parameswaran says the insurance result is a disappointment, like that recently announced by IAG.

“Rates are rising, but the impacts are probably still to be seen in terms of profitability,” he said. “I think we’ll see more in 2010.”

Both analysts see the board’s decision to freeze directors’ fees and executive bonus pools as appropriate.

“You do want to make sure management will stay but frankly, with the new CEO coming on board [Patrick Snowball, on September 1], you never know,” Mr Parameswaran said. “There’s going to be a shake-up of some sort.”