What is making Suncorp Bank grab attention these days?
Amidst the volatile environment in the banking sector with big banks getting a hit from the new tax levy and the recent ratings cut by credit ratings agency, Standard & Poors for about 23 Australian financial institutions (including Bendigo and Adelaide Bank and Bank of Queensland) at the back of housing market risks, Suncorp Bank (ASX: SUN) is reluctant to take a backseat in making a headline.
The bank has lifted third-quarter home loan lending by 2.8 per cent. In the latest quarterly update, the home lending portfolio has been reported to have grown modestly reflecting challenging market conditions. The Business lending growth was also flat while strong new business volumes were witnessed. However, repayments from successfully completed property developments and favourable conditions for agribusiness customers led to repayment of loans. On the other hand, the bank has less exposure to the higher risk lending segments of inner-city apartments and businesses affected by the resources industry slowdown. SUN has also been able to maintain a sound credit quality (with impairment losses of $7 million, or 5 basis points of gross loans and advances (annualised)). Further, the Bank’s Common Equity Tier 1 (CET 1) ratio continues to be strong at 9.19% and is above the target range of 8.5% to 9.0%. Interestingly, the bank has signalled for a modest portfolio growth in home lending and business lending while many competitors are adopting conservative strategies due to an impact from regulatory interventions, and thus, have indicated for a downturn.
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