Margin loan losses for St George

St George Bank yesterday foreshadowed that it may lose some, and the market may be guessing that it will be nearly all, of a $25 million margin loan on shares in MFS Limited, the fund manager whose shares have been suspended for weeks now and which yesterday had to delay publication of its half year financial statements.

Presumably the St George loans are to senior executives of MFS who have already had shares sold under margin calls this year. The bank's disclosure to the ASX also mentions personal guarantees as security over the margin loans.

The bank also disclosed, or reiterated, that it had aggregate loans of $458 million to various Centro group entities and held a $60 million participation in an $850 million unsecured loan to Allco Finance Group - both poster children of the current flap over credit quality.

On more routine matters St George said it experienced growth of 10 per cent annualised in home loans in the four months to January 2008; growth of 31 per cent in middle market receivables and growth of 18 per cent in deposits.