Analysts say Suncorp shareholders should not get too excited about “enhanced special dividend payments” hinted at in a letter by Chairman John Story last week.

“When the world economies emerge from the current crisis, we will explore the possibility of enhanced special dividend payments in recognition of an accumulating franking credit account,” Mr Story wrote in the letter lodged with the Australian Securities Exchange.

Credit Suisse analyst Arjan van Veen says he wouldn’t expect anything more to happen until the 2011 financial year at the earliest.

“It’s a pretty big ‘if’ at the moment, given how much data we have to work with,” he told insuranceNEWS.com.au. “[Bank] bad debts haven’t peaked and effectively the share price is telling you that things aren’t going to be that great.”

Morningstar analyst David Walker says it is premature to be talking about special dividends when Suncorp has just slashed the interim dividend by 62% and the final dividend will be similarly slashed. Expect nothing before the 2011 financial year.

“Suncorp doesn’t have the profitability to justify ordinary dividends of anything like the recent peak of 2007 and 2008, so I think shareholders would like to see ordinary dividends recover in time to sustainable levels,” he told insuranceNEWS.com.au.

“A special dividend would be a bit of a stretch unless everything goes in the company’s favour.”