The bank also responds to Reserve Bank move
Suncorp Bank’s home lending portfolio shrunk $64 million, or 0.1%, over the September quarter, but momentum returned with a rebound in application volumes.
In an ASX announcement, Suncorp Bank said it maintains a high quality and conservatively positioned home lending portfolio, with a strong focus on customer and broker experience, resulting in strong Net Promotor Scores (NPS) and market-leading turnaround times.
Business lending and agribusiness
Suncorp Bank’s business lending decreased by $107m, or 0.9%, in the September quarter, driven by both seasonal trends and external refinances.
Agribusiness also reduced by $134m, aligning with seasonal patterns and increased external refinances late in the quarter. This was partly offset by $16m growth in the commercial lending portfolio, primarily due to higher drawdowns in development finance.
The SME portfolio expanded by $11m, propelled by solid growth in the relationship-managed segment.
Household deposits
Household deposit growth for the quarter fell below strong system growth levels due to heightened competition. Retail term deposits (44.3% annualised) and savings account balances (9.3% annualised) grew, but this was partially offset by a 9% (annualised) contraction in the transaction portfolio. Pricing on both lending and deposits continued to reflect the competitive environment, with pressure on net interest margin.
Impairment release and asset quality
Suncorp Bank reported a net impairment release of $2m for the September quarter, driven by recoveries in the specific provision. Write-offs were minimal, and the collective provision remained unchanged.
Gross impaired assets contracted by $25m, reflecting sound asset quality. However, total 90+ days past due loans not impaired increased by $47m over the quarter to $380m, driven by a 19m rise within the commercial lending portfolio, and an $18m lift within the home lending portfolio, due to interest rates and inflationary pressures.
Liquidity and capital strength
Despite market challenges, Suncorp Bank maintained robust liquidity and capital positions. The liquidity coverage ratio (LCR) averaged 141% over the quarter, and the net stable funding ratio (NSFR) ended at 125%. The common equity tier 1 ratio remained solid at 10.38%, within the target operating range of 10% to 10.5%.
Interest rate changes
In response to the Reserve Bank’s decision on November 7, Suncorp Bank has announced changes to its interest rates for home loan customers.
From November 17, home loan variable rates will increase by 0.25% per annum. This adjustment translates to an approximate $14 increase in monthly repayments for every $100,000 of the remaining loan balance on a 25-year variable loan.
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