Non-major sees home lending ease in March quarter

Non-major bank Suncorp has released a quarterly update for the three months to 31 March, revealing that its home lending portfolio grew by 0.3 per cent to $153 million, below system.

The figures for the March quarter are up 1.2 per cent on an annualised basis but remained subdued.

The bank’s total home loan portfolio rose to $53 billion in March 2023, up 10.2 per cent on March 2022.

In its results update, the bank said home lending growth was “supported by strong service levels”, including lower turnaround times and significantly improved customer and broker experiences.

However, it added that the bank is maintaining a “high-quality and conservatively positioned home lending porfolio”, which is largely positioned towards owner-occupiers on principal and interest repayment terms with a loan-to-value ratio (LVR) under 80 per cent.

Given the rising interest rates and economic pressures, mortgage repayment delays were beginning to show, with total 90+ days past due loans increasing by $43 million over the quarter to $324 million.

“This was primarily driven by a $28 million increase within the home lending portfolio,” the update noted.

Business lending lifted $158 million, or 1.4 per cent, to a total of $12 billion, with agribusiness lifting $104 million.

Commercial lending growth of $80 million was driven by lending to new customers and increases for existing customers, particularly in Queensland.

However, the bank’s SME portfolio contracted $26 million, due to an uptick in external refinances late in the quarter.

The results came as ANZ’s proposed acquisition of Suncorp’s banking arm is being considered by the competition watchdog, with a formal decision expected on 12 June 2023.

The transaction, if given the go-ahead, would include a cash sale of Suncorp Bank to ANZ for $4.9 billion ($1.3 billion of goodwill paid above net tangible assets), and includes its $47 billion of home loans, $45 billion in deposits, and $11 billion in commercial loans.

[Related: ANZ confident over Suncorp deal]