Further strife concerning loans to property developers in New South Wales and a rise in arrears in the flood-affected areas of its home state of Queensland have eroded credit quality at Suncorp Bank over the March 2011 quarter.The ratio of impaired loans and those 90 days or more overdue to total loans increased to 6.13 per cent at the end of March, up from 5.82 per cent at the end of December.Loans to NSW developers accounted for $129 million of the rise in impaired loans over the quarter, which now stand at $2.5 billion. The bank achieved recoveries of a similar amount over the quarter.The rise in home loan arrears, because of the January floods, lifted this ratio in the "core" bank to 1.28 per cent, from 1.04 per cent, over the quarter.In the non-core bank, where Suncorp has assets in run-off, the ratio was fractionally higher at 5.17 per cent.