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Home loans take precedence in Suncorp overhaul

Broker engagement, turnaround speed and streamlined lending processes are all being prioritised at Suncorp, as the bank swings for a larger slice of the mortgage market.

The bank’s top executives have reported back on the group’s progress in its simplification strategy in a recent investor presentation, outlining its game plan for the coming years.

Home lending is the “number one priority” and the top area the bank is investing in, according to Suncorp banking and wealth chief executive Clive van Horen, despite previous inconsistent growth. The bank is concentrating on “speed, simplicity and consistency”, the chief said.

“We have a 2.3 per cent market share, which means we’re coming off a low base, in a very large contestable market,” Mr van Horen said in an address to Suncorp investors.

“We’ve seen other mid-sized banks like us succeed, and so can we. We have a clear plan, we are investing in growth and we have consistently funded teams that are improving that end-to-end process.”

Mortgage brokers were noted as “core to success” in the bank’s presentation, with Suncorp pledging to improve broker experience. Around 70 per cent of the bank’s flows originate from brokers, Mr van Horen reported.

The bank has plans to launch a new broker portal, as well as simplifying its required documentation and adding frontline support for brokers, after it worked on improving its transparency around turnaround times.

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Victoria will be among key areas for broker support where Suncorp has previously underperformed, Mr van Horen said.

The bank has also committed to maintaining competitive pricing.

“On pricing, we don’t believe that we need to be the cheapest; however, we will consistently top quartile. This is especially important with the broker best interests duty which is coming into play,” Mr van Horen said.

Currently, Suncorp is also working on simplifying its business lending technology, through consolidating its loan platforms, and refreshing its lending credit policy.

At the same time, the bank has signalled plans to form a digital lending origination team and to invest in online capabilities. Digital-sourced home loans have surged by 150 per cent compared with a year ago, Mr van Horen noted, with the segment expected to grow further.

Suncorp has also increased its lending-focused employees, having trained around 20 per cent of branch staff to support home loans.

Branch staff have also been cross-trained to give customer support over the phone, adapting to remote banking through the COVID crisis and working in addition to the bank’s 280 contact centre staff.

But around 30 branches have been closed in the last 15 months as in-person transactional activity has dropped. Suncorp now has 83 branches across Australia.

The group has aimed for a 50 per cent cost-to-income ratio in FY23, with lending volume growth expected to drive increased revenue. Alongside that, the bank is targeting cost efficiencies through investment in digitisation and automation, self-service capability and distribution.

Suncorp commenced the simplification of its group portfolio in February 2020, with a renewed focus on home lending. To date, it has cut a personal loan product and seven deposit products from sale. 

In April, Suncorp also declared that it would be selling its wealth business to LGIAsuper for $45 million, with the sale expected to wrap up in the 2022 financial year.

Group CEO Steve Johnston called the deal a “significant, important and strategic initiative and milestone for the group” that will allow the group’s leadership team to focus exclusively on its remaining banking, lending and insurance businesses.

Suncorp CRO to lead people, culture

Suncorp’s chief risk officer, Fiona Thompson, is set to become group executive of people, culture and advocacy from 1 June. 

The newly formed executive role will join the group’s people and culture function with its corporate affairs, customer advocate and regulatory affairs teams.

Mr Johnston commented the alignment between Suncorp’s people and culture objectives and its advocacy program formed the rationale for merging the functions.

“Advocacy forms a key pillar of Suncorp’s strategy. We are taking a more active role in advocating for issues that are important for our customers and the broader community. This program is gaining traction with governments and other stakeholders,” Mr Johnston said.

“Fiona has a long history within Suncorp across a range of risk, regulatory, legal and customer functions which have given her a comprehensive understanding of what is required to deliver the outcomes we need from this important portfolio.”

Longstanding Suncorp executive Stuart Cameron will become acting CRO, while the bank hunts for Ms Thompson’s permanent replacement. Mr Cameron was most recently CRO, insurance and financial risk.

Ms Thompson added that she is excited to lead the portfolio.

“People, culture and advocacy sit at the heart of the group’s strategy and purpose and each will play a critical part in helping to deliver the financial outcomes that make Suncorp a sustainable investable and growing business,” she said.

[Related: Non-major bank waives annual fees]

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