We all had a good snigger this week when Patrick Snowball was announced as the new CEO of Suncorp Metway. Once the jokes had done the rounds, brokers settled in to praise the appointment of a man with a strong insurance background.
Suncorp might be part insurer, part bank, but given (storms aside) insurance earnings are healthy at present and bank earnings quite the opposite, insurance is currently accounting for some 90 per cent of Suncorp's group earnings. This would itself suggest an insurer might be a more sensible appointment than a banker. It also lends weight to the long-held belief (or desperate wish) that Suncorp will attempt to split off its banking division.
Brokers may have given Mr Snowball their seal of approval, but the appointment does not affect the tough conditions the company continues to face.
Analysts are hanging on to positive ratings on Suncorp, given the bank is effectively valued in the negative at the current share price, but that doesn't mean potential banking suitors are lining up in droves. Analysts despair that as each day passes without an announcement, the sort of bank industry numbers as discussed above are making Suncorp less and less attractive.
Once again, it may be a case of waiting for year-end results.
FNArena