SUNCORP GROUP LIMITED — Audit Report / Information 2016

Feb 10, 2016

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ABN 66 145 290 124 Suncorp Group Limited Suncorp Bank APS330 as at 31 December 2015 Release date: 11 February 2016

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APS330 as at 31 December 2015

Suncorp Bank

Basis of preparation

This document has been prepared by Suncorp Bank to meet the disclosure obligations under the Australian Prudential Regulation Authority (APRA) Australian Prudential Standard (APS) 330 Public Disclosure .

Suncorp Bank is represented by Suncorp-Metway Limited (SML) and its subsidiaries. SML is an authorised deposit-taking institution (ADI) and a wholly owned subsidiary of Suncorp Group Limited. Suncorp Group is represented by Suncorp Group Limited and its subsidiaries.

Other than statutory information required by a regulator (including APRA), all financial information is measured in accordance with Australian Accounting Standards. All figures have been quoted in Australian dollars and have been rounded to the nearest million.

This document has not been audited nor reviewed in accordance with Australian Auditing Standards. It should be read in conjunction with Suncorp Group’s consolidated annual and interim financial reports which have been either audited or reviewed in accordance with Australian Auditing Standards.

Figures relate to the quarter ended 31 December 2015 (unless otherwise stated) and should be read in conjunction with other information concerning Suncorp Group filed with the Australian Securities Exchange (ASX).

Disclaimer

This report contains general information which is current as at 11 February 2016. It is information given in summary form and does not purport to be complete.

It is not a recommendation or advice in relation to the Suncorp Group and Suncorp Bank or any product or service offered by its entities. It is not intended to be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.

The information in this report is for general information only. To the extent that the information may constitute forward-looking statements, the information reflects Suncorp Group’s intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices at the date of this report. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which are beyond Suncorp Group’s control, which may cause actual results to differ materially from those expressed or implied.

Suncorp Group and Suncorp Bank undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report (subject to ASX disclosure requirements).

Registered Office

Level 28, 266 George Street, Brisbane Queensland 4000 Telephone: (07) 3362 1222 www.suncorpgroup.com.au

Investor Relations

Mark Ley Head of Investor Relations Telephone: (02) 8121 1221 mark.ley@suncorp.com.au

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Suncorp Bank

APS330 as at 31 December 2015

Table of contents

Basis of preparation .................................................................................................................................................... 2 Regulatory capital reconciliation ............................................................................................................................... 4 Table 1: Capital disclosure template ......................................................................................................................... 6 Table 2: Main features of capital instruments ......................................................................................................... 10 Table 3: Capital adequacy......................................................................................................................................... 11 Table 4: Credit risk .................................................................................................................................................... 12 Table 5: Securitisation exposures ........................................................................................................................... 17 Table 20: Liquidity coverage ratio disclosure ......................................................................................................... 18 Appendix – Definitions .............................................................................................................................................. 20

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APS330 as at 31 December 2015

Suncorp Bank

REGULATORY CAPITAL RECONCILIATION

The following table discloses the consolidated balance sheet of SML and its subsidiaries (Suncorp Bank), as published in its reviewed consolidated interim financial report, and the balance sheet under the Level 2 regulatory scope of consolidation pursuant to APS 111 Capital Adequacy: Measurement of Capital .

Each component of capital reported below in Table 1: Common Disclosures – Composition of Capital can be reconciled to the balance sheets below using the reference letters included in both tables.

	BALANCE SHEET PER PUBLISHED REVIEWED FINANCIAL STATEMENTS	ADJUSTMENTS	BALANCE SHEET UNDER REGULATORY SCOPE OF CONSOLIDATION	REFERENCE
	DEC-15 DEC-15 DEC-15
	$M $M $M
Assets	765 464	- 765 - 464
Cash and cash equivalents
Receivables due from other banks
Tradingsecurities	1,119 663 5,520 - 52,941	- 1,119 - 663 - 5,520 12 12 (2,872) 50,069
Derivatives
Investment securities
Investment in regulatorynon-consolidated subsidiaries				(j)
Loans, advances and other receivables
of which: eligible collective provision component of GRCL in tier 2 capital		(93) 192 8		(o)
of which: loan and lease origination fees and commissions paid to mortgage . originators and brokers in CET1 regulatory adjustments				(f)
of which: costs associated with debt raisings in CET1 regulatory adjustments				(g)
Deferred tax assets	47	- 47
of which: arising from temporary differences included in CET1 regulatory . adjustments		51		(e)
Other assets	191	(34) 157
of which: loan and lease origination fees and commissions paid to mortgage . originators and brokers in CET1 regulatory adjustments		3		(h)
Goodwill and intangible assets	21	- 21		(d)
Total assets Liabilities	61,731 (2,894) 58,837 (401) - (401) (44,022) (13) (44,035) (358) 11 (347) - (4) (4) (q) (422) 9 (413) - (44) (44) (3,154) 2,919 (235)
Payables due to other banks
Deposits and short-term borrowings
Derivatives
Securitisation derivatives in CET1 regulatoryadjustments
Payables and other liabilities
Due to regulatorynon-consolidated subsidiaries
Securitisation liabilities
of which: securitisation start-up costs in CET1 regulatory adjustments		8		(i)
Debt issues	(8,891) - (8,891)
Total liabilities excluding loan capital Loan capital	(57,248) 2,878 (54,370) - (742) - (742)
Subordinated notes
of which: directly issuedqualifying tier 2 instruments		(670) (m) (72) (n)
of which: directly issued instruments subject to phase out from tier 2
Preference shares	-	- -		(l)
Total loan capital	(742) - (742)
Total liabilities	(57,990) 2,878 (55,112)
Net assets	3,741	(16) 3,725
Equity	(2,648) - (2,648) (a) (450) - (450) (k) 262 - 262
Share capital
Capital notes
Reserves
of which: equity component of GRCL in tier 2 capital		(96) (4)		(p)
of which: AFS reserve				(c)
Retainedprofits	(905) 16 (889)
of which: included in CET1		(520) (b)
Total equity	(3,741) 16 (3,725)

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Suncorp Bank

APS330 as at 31 December 2015

REGULATORY CAPITAL RECONCILIATION (continued)

The Level 2 group for regulatory capital purposes consists of the parent entity, SML, and its eligible subsidiaries.

There are no entities included in the regulatory scope of consolidation which are excluded from the accounting scope of consolidation.

The following legal entities are included in the accounting scope of consolidation but are excluded from the regulatory scope of consolidation:

	TOTAL ASSETS TOTAL LIABILITIES
	DEC-15 DEC-15 $ $
SPDEF #2 Pty Ltd	1 -
Principal activity:

The company acts as trustee for Suncorp Property Development Equity Fund #2 Unit Trust.

	DEC-15 DEC-15 $M $M
Suncorp Property Development Equity Fund #2 Unit Trust	29 (5)
Principal activity: The Trust was established by the directors of SPDEF #2 Pty Ltd (the trustee) for the purpose of joint venture to develop land for the purpose of reselling as residential housing lots.	forming an unincorporated

Securitisation special purpose vehicles1	DEC-15 DEC-15 $M $M
Apollo Series 2007-1E Trust Apollo Series 2010-1 Trust Apollo Series 2011-1 Trust Apollo Series 2012-1 Trust Apollo Series 2013-1 Trust Apollo Series 2015-1 Trust	265 (265) 241 (241) 428 (428) 425 (425) 558 (558) 1,036 (1,036)
Principal activity:

The Trusts were established for the purpose of raising funds, via the issue of mortgage backed securities, to fund the purchase of mortgage loans by equitable assignment.

Note

1. The Trusts qualify for regulatory capital relief under APS 120 and are therefore deconsolidated from the Level 2 regulatory group. The assets of the Trusts include the secured loans from SML, representing the outstanding balance of securitised mortgages and accrued interest, as well as cash and other receivables.

Any transfer of funds or regulatory capital within the Level 2 group can occur only after the relevant approvals from management and the Board of each affected entity, in line with the Suncorp Group’s capital management policies. Any such transactions must be consistent with the Suncorp Group’s capital management strategy objectives to ensure each entity in the Level 2 group has sufficient capital resources to maintain the business and operational requirements, retain sufficient capital to exceed externally imposed capital requirements, and ensure Suncorp Bank’s ability to continue as a going concern.

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APS330 as at 31 December 2015

Suncorp Bank

TABLE 1: CAPITAL DISCLOSURE TEMPLATE

The disclosures below are presented using the post 1 January 2018 common disclosure template as, pursuant to APRA guidelines, SML and its eligible subsidiaries is applying, in full, the Basel III regulatory adjustments from 1 January 2013.

		DEC-15	SOURCE IN REGULATORY CAPITAL RECON- CILIATION
		$M
1	Common Equity Tier 1 capital: instruments and reserves	2,648
	Directly issued qualifying ordinary shares (and equivalent for mutually-owned entities) capital		(a)
2 3	Retained earnings	520 4	(b)
	Accumulated other comprehensive income (and other reserves)		(c)
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25	Directly issued capital subject to phase out from CET1 (only applicable to mutually- owned companies)	- -
	Ordinary share capital issued by subsidiaries and held by third parties (amount allowed ingroupCET1)
	Common Equity Tier 1 capital before regulatory adjustments Common Equity Tier 1 capital: regulatory adjustments	3,172 - 21 - - - - - - - - - - - - - - - - -
	Prudential valuation adjustments
	Goodwill (net of related tax liability)		(d)
	Other intangibles other than mortgage servicing rights (net of related tax liability)
	Deferred tax assets that rely on future profitability excluding those arising from temporarydifferences(net of related tax liability)
	Cash-flow hedge reserve
	Shortfall of provisions to expected losses
	Securitisation gain on sale (as set out in paragraph 562 of Basel II framework)
	Gains and losses due to changes in own credit risk on fair valued liabilities
	Defined benefit superannuation fund net assets
	Investments in own shares (if not already netted off paid-in capital on reported balance sheet)
	Reciprocal cross-holdings in common equity
	Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold)
	Significant investments in the ordinary shares of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions(amount above 10% threshold)
	Mortgage service rights (amount above 10% threshold)
	Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability)
	Amount exceeding the 15% threshold
	of which: significant investments in the ordinary shares of financial entities
	of which: mortgage servicing rights
	of which: deferred tax assets arising from temporary differences

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Suncorp Bank

APS330 as at 31 December 2015

TABLE 1: CAPITAL DISCLOSURE TEMPLATE (continued)

		DEC-15	SOURCE IN REGULATORY CAPITAL RECON- CILIATION
		$M
26 26a 26b 26c 26d 26e 26f 26g 26h 26i 26j 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 41a 41b 41c 42 43 44 45	National specific regulatory adjustments (sum of rows 26a, 26b, 26c, 26d, 26e, 26f, 26g,26h,26i and 26j)	278 - - - - 51 (e) 211 (f)+(g)+(h)+(i) - - - 16 (j)-(q) -
	of which: treasury shares
	of which: offset to dividends declared under a dividend reinvestment plan (DRP), to . the extent that the dividends are used to purchase new ordinary shares . issued by the ADI
	of which: deferred fee income
	of which: equity investments in financial institutions not reported in rows 18, 19 and 23
	of which: deferred tax assets not reported in rows 10, 21 and 25
	of which: capitalised expenses
	of which: investments in commercial (non-financial) entities that are deducted under . APRA requirements
	of which: covered bonds in excess of asset cover in pools
	of which: undercapitalisation of a non-consolidated subsidiary
	of which: other national specific regulatory adjustments not reported in rows 26a to 26i
	Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover deductions
	Total regulatory adjustments to Common Equity Tier 1	299
	Common Equity Tier 1 Capital (CET1)	2,873
	Additional Tier 1 Capital: instruments	450 (k) 450 (k) - - (l) - -
	Directly issued qualifying Additional Tier 1 instruments
	of which: classified as equity under applicable accounting standards
	of which: classified as liabilities under applicable accounting standards
	Directly issued capital instruments subject to phase out from Additional Tier 1
	Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held bythirdparties(amount allowed ingroupAT1)
	of which: instruments issued by subsidiaries subject to phase out
	Additional Tier 1 Capital before regulatory adjustments Additional Tier 1 Capital: regulatory adjustments	450 - - - - - - - - -
	Investments in own Additional Tier 1 instruments
	Reciprocal cross-holdings in Additional Tier 1 instruments
	Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital(amount above 10% threshold)
	Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatoryconsolidation(net of eligible shortpositions)
	National specific regulatory adjustments (sum of rows 41a, 41b and 41c)
	of which: holdings of capital instruments in group members by other group members . on behalf of thirdparties
	of which: investments in the capital of financial institutions that are outside the scope of . regulatory consolidations not reported in rows 39 and 40
	of which: other national specific regulatory adjustments not reported in rows 41a & 41b
	Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions
	Total regulatory adjustments to Additional Tier 1 capital	-
	Additional Tier 1 capital (AT1)	450
	Tier 1 Capital (T1=CET1+AT1)	3,323

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APS330 as at 31 December 2015

Suncorp Bank

TABLE 1: CAPITAL DISCLOSURE TEMPLATE (continued)

		DEC-15	SOURCE IN REGULATORY CAPITAL RECON- CILIATION
		$M
46 47 48 49 50 51 52 53 54 55 56 56a 56b 56c 57 58 59 60 61 62 63 64 65 66	Tier 2 Capital: instruments and provisions
	Directly issued qualifying Tier 2 instruments
	Directly issued capital instruments subject to phase out from Tier 2
67	of which: G-SIB buffer requirement (not applicable)
68	Common Equity Tier 1 available to meet buffers (as a percentage of risk-weighted assets) 9.41% National minima (if different from Basel III)
69 70 71	National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) n/a National Tier 1 minimum ratio (if different from Basel III minimum) n/a National total capital minimum ratio (if different from Basel III minimum) n/a
72 73 74 75	Amount below thresholds for deductions (not risk-weighted) Non-significant investments in the capital of other financial entities - Significant investments in the ordinary shares of financial entities - Mortgage servicing rights (net of related tax liability) - Deferred tax assets arising from temporary differences (net of related tax liability) 51		(e)

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Suncorp Bank

APS330 as at 31 December 2015

TABLE 1: CAPITAL DISCLOSURE TEMPLATE (continued)

		DEC-15	SOURCE IN REGULATORY CAPITAL RECON- CILIATION
		$M
76 77 78 79 80 81 82 83 84 85	Applicable caps on the inclusion ofprovisions in Tier 2	189 339 n/a n/a - - 536 - 132 -
	Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardised approach(prior to application of cap)		(o)+(p)
	Cap on inclusion of provisions in Tier 2 under standardised approach
	Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach(prior to application of cap)
	Cap for inclusion of provisions in Tier 2 under internal ratings-based approach Capital instruments subject to phase-out arrangements (only applicable between 1 Jan 2018 and 1 Jan 2022)
	Current cap on CET1 instruments subject to phase out arrangements
	Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities)
	Current cap on AT1 instruments subject to phase out arrangements
	Amount excluded from AT1 instruments due to cap (excess over cap after redemptions and maturities)
	Current cap on T2 instruments subject to phase out arrangements
	Amount excluded from T2 due to cap (excess over cap after redemptions and maturities)

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APS330 as at 31 December 2015

Suncorp Bank

TABLE 2: MAIN FEATURES OF CAPITAL INSTRUMENTS

Attachment B of APS330 details the continuous disclosure requirements for the main features of all capital instruments included in Suncorp Bank’s regulatory capital.

The Suncorp Group’s main features of capital instruments are updated on an ongoing basis and are available at www.suncorpgroup.com.au/investors/regulatory-disclosures.

The full terms and conditions of all of Suncorp Group’s regulatory capital instruments are available at www.suncorpgroup.com.au/investors/securities[1] .

Note

1. The published full terms and conditions represent the comparable capital instruments issued by Suncorp Group Limited to external investors. The terms of these instruments may differ slightly to those instruments issued by the regulatory Level 2 group.

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APS330 as at 31 December 2015

TABLE 3: CAPITAL ADEQUACY

	CARRYING VALUE	CARRYING VALUE	AVG RISK WEIGHT	RISK-WEIGHTED ASSETS	RISK-WEIGHTED ASSETS
	DEC-15 SEP-15 DEC-15 DEC-15 SEP-15 $M $M % $M $M
On-balance sheet credit risk-weighted assets Cash items Claims on Australian and foreign governments Claims on central banks, international banking agencies, regional development banks, ADIs and overseas banks Claims on securitisation exposures Claims secured against eligible residential mortgages Past due claims Other retail assets Corporate Other assets and claims	495 668 1 5 8 2,314 2,497 - - - 3,044 3,180 21 627 654 848 955 20 170 191 40,595 40,393 38 15,455 15,446 493 499 92 452 460 454 491 80 361 393 8,310 8,371 100 8,295 8,351 250 238 99 248 237
Total on-balance sheet credit risk-weighted assets	56,803 57,292 45 25,613 25,740
	NOTIONAL AMOUNT	CREDIT EQUIVALENT	AVG RISK WEIGHT	RISK-WEIGH	TED ASSETS
	DEC-15	DEC-15	DEC-15	DEC-15
Off-balance sheet positions Guarantees entered into in the normal course of business Commitments to provide loans and advances Foreign exchange contracts Interest rate contracts Securitisation exposures CVA capital charge	263 262 68 177 188 7,943 1,989 55 1,099 1,050 5,668 185 27 50 42 56,661 94 43 40 38 2,592 39 85 33 36 - - - 87 112
Total off-balance sheet positions	73,127 2,569 58 1,486 1,466
Market risk capital charge Operational risk capital charge Total off-balance sheet positions Total on-balance sheet credit risk-weighted assets				136 128 3,304 3,278 1,486 1,466 25,613 25,740
Total assessed risk				30,539 30,612
Risk-weighted capital ratios				% %
Common Equity Tier 1 Tier 1 Tier 2				9.41 8.86 10.88 10.33 3.05 3.22
Total risk-weighted capital ratio				13.93 13.55

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APS330 as at 31 December 2015

TABLE 4: CREDIT RISK

Table 4A: Credit risk by gross credit exposure – outstanding as at 31 December 2015

	REC EIV AB LES DU E FR OM OTHER BA NKS ( 2 ) TR AD ING SECU RITIES IN V ESTM EN T SECU RITIES LOAN S, AD V A NC ES AN D OTHER RECEIV AB LES ( 3 ) C REDIT C OM M ITM EN TS ( 4 ) D ER IV A TIV E INSTR UM ENTS ( 4 )	TOTAL CR ED IT RISK IM PA IR ED ASSETS PA ST D UE N OT IM PAIR ED > 9 0 DA Y S TOTAL N OT PA ST D UE OR IM PAIR ED SPEC IFIC PR OV ISIONS
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	$M $M $M $M $M $M	$M $M $M $M $M
	- - - 3,827 202 -	4,029 103 28 3,898 21
	- - - 480 124 -	604 1 - 603 1
	464 1,119 4,672 375 231 279	7,140 - - 7,140 -
	- - - 870 33 -	903 12 5 886 6
	- - - 263 16 -	279 2 2 275 1
	- - - 238 9 -	247 9 1 237 9
	- - - 1,977 88 -	2,065 4 12 2,049 4
	- - - 40,174 1,413 -	41,587 17 296 41,274 3
	- - - 345 8 -	353 8 8 337 5
	- - - - - -	- - - - -
	- - - 1,699 127 -	1,826 20 29 1,777 10
Total gross credit risk Securitisation exposures(1)	464 1,119 4,672 50,248 2,251 279	59,033 176 381 58,476 60
	- - 848 2,872 28 11	3,759 - - 3,759 -
Total including Securitisation exposures Impairment provision TOTAL	464 1,119 5,520 53,120 2,279 290	62,792 176 381 62,235 60
		(179) (60) (26) (93)
		62,613 116 355 62,142

(1) The securitisation exposures of $2,872 million included under “Loans, advances and other receivables” qualify for regulatory capital relief under APS 120 and therefore do not contribute to the Bank’s Total gross credit risk. The remaining securitisation exposures carry credit risk commensurate with their respective asset classes in accordance with APS 120.

(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.

(3) Total loans, advances and other receivables include receivables due from related parties. (4)

“Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.

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Suncorp Bank

APS330 as at 31 December 2015

TABLE 4: CREDIT RISK (continued)

Table 4A: Credit risk by gross credit exposure – outstanding as at 30 September 2015

	R EC EIV A B LES D U E FR OM OTHER B A N KS ( 2 ) TR A D IN G SEC U R ITIES IN V ESTM EN T SEC U R ITIES LOA N S, A D V A N C ES A N D OTHER R EC EIV A B LES ( 3 ) C R ED IT C OM M ITM EN TS ( 4 ) D ER IV A TIV E IN STR U M EN TS ( 4 )	TOTA L C R ED IT R ISK IM PA IR ED A SSETS PA ST D U E N OT IM PA IR ED > 9 0 D A Y S TOTA L N OT PA ST D U E OR IM PA IR ED SPEC IFIC PR OV ISION S
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	$M $M $M $M $M $M	$M $M $M $M $M
	- - - 3,909 182 -	4,091 112 31 3,948 25
	- - - 480 125 -	605 10 - 595 3
	619 1,908 5,170 351 168 373	8,589 - - 8,589 -
	- - - 899 32 -	931 27 5 899 17
	- - - 277 19 -	296 1 - 295 -
	- - - 230 11 -	241 7 1 233 3
	- - - 1,983 78 -	2,061 2 5 2,054 3
	- - - 39,954 1,607 -	41,561 21 289 41,251 5
	- - - 365 8 -	373 - 8 365 -
	- - - - - -	- - - - -
	- - - 1,704 108 -	1,812 22 28 1,762 9
Total gross credit risk Securitisation exposures(1)	619 1,908 5,170 50,152 2,338 373	60,560 202 367 59,991 65
	- - 955 3,070 29 13	4,067 - - 4,067 -
Total including Securitisation exposures Impairment provision TOTAL	619 1,908 6,125 53,222 2,367 386	64,627 202 367 64,058 65
		(191) (65) (29) (97)
		64,436 137 338 63,961

(1) The securitisation exposures of $3,070 million included under “Loans, advances and other receivables” qualify for regulatory capital relief under APS 120 and therefore do not contribute to the Bank’s Total gross credit risk. The remaining securitisation exposures carry credit risk commensurate with their respective asset classes in accordance with APS 120.

(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.

(3) Total loans, advances and other receivables include receivables due from related parties.

(4) “Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.

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Suncorp Bank

APS330 as at 31 December 2015

TABLE 4: CREDIT RISK (continued)

Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 October to 31 December 2015

	REC EIV AB LES DU E FR OM OTHER BA NKS ( 2 ) TR AD ING SECU RITIES IN V ESTM EN T SECU RITIES LOAN S, AD V A NC ES AN D OTHER RECEIV AB LES ( 3 ) C REDIT C OM M ITM EN TS ( 4 ) D ER IV A TIV E INSTR UM ENTS ( 4 )	TOTAL CR ED IT RISK IM PA IR ED ASSETS PA ST D UE N OT IM PAIR ED > 9 0 DA Y S TOTAL N OT PA ST D UE OR IM PAIR ED SPEC IFIC PR OV ISIONS
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	$M $M $M $M $M $M	$M $M $M $M $M
	- - - 3,868 192 -	4,060 108 30 3,922 22
	- - - 480 125 -	605 6 - 599 1
	542 1,514 4,921 363 200 326	7,866 - - 7,866 -
	- - - 885 33 -	918 20 5 893 12
	- - - 270 18 -	288 2 1 285 1
	- - - 234 10 -	244 8 1 235 6
	- - - 1,980 83 -	2,063 3 9 2,051 4
	- - - 40,064 1,510 -	41,574 19 293 41,262 4
	- - - 355 8 -	363 4 8 351 3
	- - - - - -	- - - - -
	- - - 1,702 118 -	1,820 21 29 1,770 10
Total gross credit risk Securitisation exposures(1)	542 1,514 4,921 50,201 2,297 326	59,801 191 376 59,234 63
	- - 902 2,971 29 12	3,914 - - 3,914 -
Total including Securitisation exposures Impairment provision TOTAL	542 1,514 5,823 53,172 2,326 338	63,715 191 376 63,148 63
		(186) (63) (28) (95)
		63,529 128 348 63,053

(1) The securitisation exposures of $2,971 million included under “Loans, advances and other receivables” qualify for regulatory capital relief under APS 120 and therefore do not contribute to the Bank’s Total gross credit risk. The remaining securitisation exposures carry credit risk commensurate with their respective asset classes in accordance with APS 120.

(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.

(3) Total loans, advances and other receivables include receivables due from related parties. (4)

“Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.

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Suncorp Bank

APS330 as at 31 December 2015

TABLE 4: CREDIT RISK (continued)

Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 July to 30 September 2015

	R EC EIV A B LES D U E FR OM OTHER B A N KS ( 2 ) TR A D IN G SEC U R ITIES IN V ESTM EN T SEC U R ITIES LOA N S, A D V A N C ES A N D OTHER R EC EIV A B LES ( 3 ) C R ED IT C OM M ITM EN TS ( 4 ) D ER IV A TIV E IN STR U M EN TS ( 4 )	TOTA L C R ED IT R ISK IM PA IR ED A SSETS PA ST D U E N OT IM PA IR ED > 9 0 D A Y S TOTA L N OT PA ST D U E OR IM PA IR ED SPEC IFIC PR OV ISION S
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	$M $M $M $M $M $M	$M $M $M $M $M
	- - - 3,946 178 -	4,124 112 26 3,986 25
	- - - 485 140 -	625 13 - 612 5
	607 1,646 5,184 342 192 365	8,336 - - 8,336 -
	- - - 906 40 -	946 26 4 916 17
	- - - 298 20 -	318 8 1 309 6
	- - - 232 11 -	243 7 1 235 3
	- - - 1,990 79 -	2,069 3 6 2,060 3
	- - - 39,231 1,753 -	40,984 21 306 40,657 5
	- - - 373 9 -	382 - 7 375 -
	- - - - - -	- - - - -
	- - - 1,713 109 -	1,822 22 31 1,769 10
Total gross credit risk Securitisation exposures(1)	607 1,646 5,184 49,516 2,531 365	59,849 212 382 59,255 74
	- - 1,001 3,182 31 14	4,228 - - 4,228 -
Total including Securitisation exposures Impairment provision TOTAL	607 1,646 6,185 52,698 2,562 379	64,077 212 382 63,483 74
		(200) (74) (28) (98)
		63,877 138 354 63,385

(1) The securitisation exposures of $3,182 million included under “Loans, advances and other receivables” qualify for regulatory capital relief under APS 120 and therefore do not contribute to the Bank’s Total gross credit risk. The remaining securitisation exposures carry credit risk commensurate with their respective asset classes in accordance with APS 120.

(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.

(3) Total loans, advances and other receivables include receivables due from related parties.

(4) “Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.

15

APS330 as at 31 December 2015

Suncorp Bank

TABLE 4: CREDIT RISK (continued)

Table 4B: Credit risk by portfolio – 31 December 2015

	GROSS CREDIT RISK EXPOSURE AVERAGE GROSS EXPOSURE IMPAIRED ASSETS PAST DUE NOT IMPAIRED > 90 DAYS SPECIFIC PROVISIONS CHARGES FOR SPECIFIC PROVISIONS & WRITE OFFS
Claims secured against eligible residential mortgages Other retail Financial services Government and public authorities Corporate and other claims	$M $M $M $M $M **$M **
	41,587 41,574 17 296 3 -
	353 363 8 8 5 5
	7,140 7,866 - - - -
	- - - - - -
	9,953 9,998 151 77 52 6
Total	59,033 59,801 176 381 60 11

Table 4B: Credit risk by portfolio – 30 September 2015

	GROSS CREDIT RISK EXPOSURE AVERAGE GROSS EXPOSURE IMPAIRED ASSETS PAST DUE NOT IMPAIRED > 90 DAYS SPECIFIC PROVISIONS CHARGES FOR SPECIFIC PROVISIONS & WRITE OFFS
Claims secured against eligible residential mortgages Other retail Financial services Government and public authorities Corporate and other claims	$M $M $M $M $M **$M **
	41,561 40,984 21 289 5 1
	373 382 - 8 - 1
	8,589 8,336 - - - -
	- - - - - -
	10,037 10,147 181 70 60 4
Total	60,560 59,849 202 367 65 6

Table 4C: General reserves for credit losses

	DEC-15 SEP-15
Collective provision for impairment Ineligible collectiveprovisions on Past Due not Impaired	$M $M
	119 126
	(26) (29)
Eligible collective provisions Equityreserve for credit losses	93 97
	96 145
General reserve for credit losses	189 242

16

Suncorp Bank

APS330 as at 31 December 2015

TABLE 5: SECURITISATION EXPOSURES

Table 5A: Summary of securitisation activity for the period

	EXPOSURES SECURITISED	EXPOSURES SECURITISED	RECOGNISED GAIN OR(LOSS) ON SALE	RECOGNISED GAIN OR(LOSS) ON SALE
	DEC-15 SEP-15 DEC-15 SEP-15 $M $M $M $M	SEP-15	DEC-15	SEP-15
Residential mortgages	- - - -
Total exposures securitised during theperiod	- - - -

Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type

	EXPOSURE	EXPOSURE
Exposure type	DEC-15 SEP-15 $M $M
Debt securities	848 955
Total on-balance sheet securitisation exposures	848 955

Table 5B(ii): Aggregate of off-balance sheet securitisation exposures by exposure type

	PRINCIPAL OR NOTIONAL EXPOSURE PRINCIPAL OR NOTIONAL EXPOSURE
Exposure type	DEC-15 SEP-15 $M $M
Liquidity facilities Derivative exposures	55 59 2,537 2,716
Total off-balance sheet securitisation exposures	2,592 2,775

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APS330 as at 31 December 2015

Suncorp Bank

TABLE 20: LIQUIDITY COVERAGE RATIO DISCLOSURE

		TOTAL UNWEIGHTED VALUE (AVERAGE)	TOTAL WEIGHTED VALUE (AVERAGE)
		DEC-15 DEC-15
		$M $M
	Liquid assets, of which:
1 2 3	High-quality liquid assets (HQLA)	3,676 4,332 -
	Alternative liquid assets (ALA)
	Reserve Bank of New Zealand (RBNZ) securities
4 5 6 7 8 9 10	Cash outflows	17,891 1,506 13,564 698 4,326 808 4,918 3,440 - - 4,112 2,633 806 806
	Retail deposits and deposits from small business customers, of which:
	stable deposits
	less stable deposits
	Unsecured wholesale funding, of which:
	operational deposits (all counterparties) and deposits in networks for cooperative
	~~b~~ ~~k~~ non-operational deposits (all counterparties)
	unsecured debt
11	Secured wholesale funding	15
12 13 14 15 16 17	Additional requirements, of which	3,015 1,555 1,396 1,396 72 72 1,546 87 947 602 8,427 669
	outflows related to derivatives exposures and other collateral requirements
	outflows related to loss of funding on debt products
	credit and liquidity facilities
	Other contractual funding obligations
	Other contingent funding obligations
18	Total cash outflows	7,786
19 20 21 22	Cash inflows	- - 1,165 819 1,216 1,216
	Secured lending (e.g. reverse repos)
	Inflows from fully performing exposures
	Other cash inflows
	Total cash inflows	2,381 2,036
			TOTAL ADJUSTED VALUE
23 24 25	Total liquid assets	8,008
	Total net cash outflows	5,751
	Liquidity Coverage Ratio (%)	139

The Liquidity Coverage Ratio (LCR) requires sufficient qualifying HQLA to be maintained to meet expected net cash outflows under an APRA-prescribed 30 calendar day stress scenario.

SML has a tiered management limit structure for the LCR to ensure that there is always an adequate buffer to the APRA Prudential Limit of 100% and calculates the LCR position against these limits on a daily basis. The amount of liquid assets held considers the amount needed to meet prudential and internal requirements (including a variety of internal stress scenarios as part of the risk management framework) and a suitable buffer reflecting management’s preference.

APRA has allowed locally-incorporated ADI’s to establish a Committed Liquidity Facility (CLF) with the Reserve Bank of Australia (RBA). SML received approval from APRA for a CLF of $4.2 billion for the 2016 calendar year ($4.8 billion for the 2015 calendar year). The $4.3 billion disclosed as ‘Alternative liquid assets’ reflects the required ‘open-repo’ of internal self-securitised Residential Mortgage Backed Securities (RMBS) with the RBA, which is considered a utilisation of the CLF and increases the HQLA.

18

Suncorp Bank

APS330 as at 31 December 2015

The main contributors to net cash outflows were modelled outflows associated deposits and unsecured wholesale funding, offset by inflows from maturing loans. The net cash outflow is sought to be minimised by targeting funding with lower LCR runoff rates and managing the maturity profile of wholesale liabilities.

SML has been compliant with the LCR prudential requirements at all times since it was introduced in January 2015. The daily average LCR for the quarter ended 31 December 2015 was 139%. This was higher than the typical operating range in light of a decision to run liquidity conservatively given global market volatility, the issuance of $750 million domestic senior unsecured notes in October and the accumulation of additional HQLA in readiness for the lower CLF from 1 January 2016.

19

APS330 as at 31 December 2015

Suncorp Bank

Appendix – Definitions

Capital adequacy ratio	Capital base divided by total assessed risk, as defined by APRA
Common Equity Tier 1	Common Equity Tier 1 Capital (CET1) comprises accounting equity
	plus adjustments for intangible assets and regulatory reserves
Common Equity Tier 1 ratio	Common Equity Tier 1 divided by total assessed risk
Credit Value Adjustment	A capital charge that covers the risk of mark-to-market losses on the
(CVA)	counterparty credit risk
Equity reserve for credit	The equity reserve for credit losses represents the difference between
losses	the collective provision for impairment and the estimate of credit
	losses across the credit cycle based on guidance provided by APRA
General Reserve Credit	The general reserve for credit losses is a reserve that covers credit
Loss (GRCL)	losses prudently estimated but not certain to arise over the full life of
	all the individual facilities based on guidance provided by APRA
Liquidity coverage ratio	Liquid assets divided by the forecast net cash outflows during a 30-
	day similated severe stressesd liquidity scenario
Past due loans	Loans outstanding for more than 90 days
Risk weighted assets	Total of the carrying value of each asset class multiplied by their
	assigned risk weighting, as defined by APRA
Total assessed risk	Credit risk-weighted assets, off-balance sheet positions, market risk
	capital charge and operational risk charge, as defined by APRA

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