Bank boss cites APRA curbs amid sluggish growth

The chief executive of a regional bank has explained how the group is responding to increased regulatory action after reporting modest growth in its mortgage portfolio.

In the trading update on Monday, Suncorp Banking and Wealth CEO David Carter said the group was quick to act following APRA’s decision to cap interest-only lending by the banks at 30 per cent of new residential home loans.

“We responded early to signals by the regulators to improve our position in relation to changes to macro-prudential settings, particularly APRA’s interest-only and investor lending,” Mr Carter said.

“We have been deliberate in shaping the portfolio through our focus on risk selection and expect modest growth in home and business lending as our competitors align to more conservative positions.”

In the last quarter, the Queensland-based bank lent $44.3bn in housing loans, up 0.4 per cent over the three months and 2.8 per cent over the entire year.

Compared to last year, investor lending has grown 7.1 per cent but remains below the APRA mandated limit of 10 per cent growth.

The bank also reported flat business lending growth, while credit quality across their business lending portfolio remained sound.

Responding to the federal budget released this month, Mr Carter said he was optimistic that the measures would achieve competitive neutrality in the banking sector.

“The Treasurer announced two measures that have the potential to support competitive neutrality – the bank levy and the harmonisation of supervision of the ADI and non-ADI sector,” he said.

“These measures have the potential to improve the effectiveness of the macroprudential settings that have recently been introduced and will go some way to realising a more level playing field.”

[Related: Major bank says new levy will cost $370m a year]

 

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Lucy Dean

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