SUNCORP GROUP LIMITED — Audit Report / Information 2017

Feb 8, 2017

SUNCORP GROUP LIMITED ABN 66 145 290 124 SUNCORP BANK APS330 as at 31 DECEMBER 2016 RELEASE DATE: 9 FEBRUARY 2017

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APS330 as at 31 December 2016

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 2016 (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 9 February 2017. 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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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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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 Shee per published reviewed Financial Statements	t Adjustments	Balance Sheet under Regulatory Scope of Consolidation	Reference
DEC-16 DEC-16 DEC-16
$M $M $M
Assets Cash and cash equivalents 1,323 Receivables due from other banks 473		- 1,323 - 473
Tradingsecurities 1,597 Derivatives 729 Investment securities 5,304 Investment in regulatorynon-consolidated subsidiaries - Loans, advances and other receivables 54,047		- 1,597 - 729 - 5,304 1 1 (2,008) 52,039
				(j)
of which: eligible collective provision component of GRCL in tier 2 capital - of which: loan and lease origination fees and commissions paid to mortgage . originators and brokers in CET1 regulatory adjustments - of which: costs associated with debt raisings in CET1 regulatory adjustments -		- (80) - 204 - 11		(o)
				(f)
				(g)
Due from relatedparties 332 Deferred tax assets 48		- 332 - 48
of which: arising from temporary differences included in CET1 regulatory . adjustments -		- 53		(e)
Other assets 185		(22) 163
of which: loan and lease origination fees and commissions paid to mortgage . originators and brokers in CET1 regulatory adjustments -		- 2		(h)
Goodwill and intangible assets 22		- 22		(d)
TOTAL ASSETS 64,060		(2,029) 62,031
Liabilities Payables due to other banks (512) - (512) Deposits and short-term borrowings (46,477) (13) (46,490) Derivatives (377) - (377) Securitisation derivatives in CET1 regulatoryadjustments - (4) (4) (q) Payables and other liabilities (366) 4 (362)
Due to relatedparties (61) - (61)
Due to regulatorynon-consolidated subsidiaries -		(33) (33)
Securitisation liabilities (2,204) 2,055 (149)
of which: securitisation start-up costs in CET1 regulatory adjustments -		- 4		(i)
Debt issues (9,585) - (9,585)
Total liabilities excluding loan capital (59,582) 2,009 (57,573)
Loan capital Subordinated notes (742) - (742)
of which: directly issuedqualifying tier 2 instruments - of which: directly issued instruments subject to phase out from tier 2 -		- (670) (m) - (72) (n)
Total loan capital (742) - (742)
TOTAL LIABILITIES (60,324) 2,009 (58,315)
NET ASSETS 3,736		(20) 3,716
Equity Share capital (2,648) - (2,648) (a) Capital notes (450) - (450) (k) Reserves 290 - 290
of which: equity component of GRCL in tier 2 capital - of which: AFS reserve -		- (85) (p) - (10) (c)
of which: cash flow hedge reserve -		- 13		(r)
Retainedprofits (928) 20 (908)
of which: included in CET1 -		- (540) (b)
TOTAL EQUITY (3,736) 20 (3,716)

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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-16 DEC-16 $ $
SPDEF #2 Pty Ltd	1 -
Principal activity:

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

	DEC-16 DEC-16 $M $M
Suncorp Property Development Equity Fund #2 Unit Trust	18 (1)
Principal activity:

The Trust was established by the directors of SPDEF #2 Pty Ltd (the trustee) for the purpose of forming an unincorporated joint venture to develop land for the purpose of reselling as residential housing lots.

Securitisation special purpose vehicles1	DEC-16 DEC-16 $M $M
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	188 (188) 332 (332) 329 (329) 428 (428) 798 (798)
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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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-16	Source in Regulatory Capital Reconciliation
	$M
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25	Common Equity Tier 1 capital: instruments and reserves Directly issued qualifying ordinary shares (and equivalent for mutually-owned entities) capital 2,648 (a) Retained earnings 540 (b) Accumulated other comprehensive income (and other reserves) (3) (c)+(r) 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 3,185 Common Equity Tier 1 capital: regulatory adjustments Prudential valuation adjustments - Goodwill (net of related tax liability) 22 (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 (13) (r) 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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Table 1: Capital Disclosure Template (continued)

		DEC-16	Source in Regulatory Capital Reconciliation
	$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) 279 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 53 (e) of which: capitalised expenses 221 (f)+(g)+(h)+(i) 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 5 (j)-(q)
	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 1 288
	Common Equity Tier 1 Capital (CET1) 2,897
	Additional Tier 1 Capital: instruments Directly issued qualifying Additional Tier 1 instruments 450 (k) of which: classified as equity under applicable accounting standards 450 (k) 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 450 Additional Tier 1 Capital: regulatory adjustments 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) 3,347

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Table 1: Capital Disclosure Template (continued)

		DEC-16	Source in Regulatory Capital Reconciliation
	$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 670 (m) Directly issued capital instruments subject to phase out from Tier 2 72 (n) Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued bysubsidiaries and held bythirdparties(amount allowed ingroupT2) - of which: instruments issued by subsidiaries subject to phase out - Provisions 165 (o)+(p)
	Tier 2 Capital before regulatory adjustments 907 Tier 2 Capital: regulatory adjustments Investments in own Tier 2 instruments - Reciprocal cross-holdings in Tier 2 instruments - Investments in the Tier 2 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 Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation,net ofeligible short positions - National specific regulatory adjustments (sum of rows 56a, 56b and 56c) - 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 consolidation not reported in rows 54 and 55 - of which: other national specific regulatory adjustments not reported in rows 56a & 56b -
	Total regulatory adjustments to Tier 2 capital -
	Tier 2 capital (T2) 907
	Total capital (TC=T1+T2) 4,254
	Total risk-weighted assets based on APRA standards 31,675
	Capital ratios and buffers Common Equity Tier 1 (as a percentage of risk-weighted assets) 9.15% Tier 1 (as a percentage of risk-weighted assets) 10.57% Total capital (as a percentage of risk-weighted assets) 13.43% Buffer requirement (minimum CET1 requirement of 4.5% plus capital conservation buffer of 2.5% plus any countercyclical buffer requirements expressed as a percentage of risk-weighted assets) 7.00% of which: capital conservation buffer requirement 2.50% of which: ADI-specific countercyclical buffer requirements -
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) 9.15% 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) 53
			(e)

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Table 1: Capital Disclosure Template (continued)

		DEC-16	Source in Regulatory Capital Reconciliation
	$M
76 77 78 79 80 81 82 83 84 85	Applicable caps on the inclusion ofprovisions in Tier 2 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardised approach(prior to application of cap) 165 Cap on inclusion of provisions in Tier 2 under standardised approach 352 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach(prior to application of cap) n/a Cap for inclusion of provisions in Tier 2 under internal ratings-based approach n/a 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 113 Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) -
			(o)+(p)

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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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Table 3: Capital Adequacy

Table 3: Capital Adequacy
	CARRYING VALUE AVG RISK WEIGHT RISK- WEIGHTED ASSETS DEC-16 SEP-16 DEC-16 DEC-16 SEP-16 $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	424 435 - - 2 2,951 2,332 - - - 2,671 2,740 22 593 598 1,094 912 20 219 182 42,541 42,206 37 15,942 15,863 480 528 94 452 497 380 412 81 308 339 8,620 8,597 100 8,610 8,581 337 307 99 335 307
Total banking assets	59,498 58,469 44 26,459 26,369
	NOTIONAL AMOUNT CREDIT EQUIVALENT AVG RISK WEIGHT RISK- WEIGHTED ASSETS
	DEC-16	DEC-16	DEC-16	DEC-16	SEP-16
	$M $M % $M $M
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	255 254 67 169 165 8,654 2,462 55 1,344 1,149 6,817 173 35 60 52 50,205 78 35 27 42 1,791 58 67 39 25 - - - 88 74
Total off-balance sheetpositions	67,722 3,025 57 1,727 1,507
Market risk capital charge	98 87
Operational risk capital charge	3,391 3,351
Total off-balance sheet positions Total on-balance sheet credit risk-weighted assets	1,727 1,507 26,459 26,369
Total assessed risk	31,675 31,314
Risk-weighted capital ratios	% %
Common Equity Tier 1 Tier 1 Tier 2	9.15 8.92 10.57 10.35 2.86 2.90
Total risk-weighted capital ratio	13.43 13.25

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Table 4: Credit Risk

Table 4A: Credit risk by gross credit exposure – outstanding as at 31 December 2016

Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions $M $M $M $M $M $M $M $M $M $M $M	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions $M $M $M $M $M $M $M $M $M $M $M
Agribusiness - - - 3,933 222 - Construction & development - - - 521 126 - Financial services 473 70 1,985 92 240 251 Hospitality - - - 903 51 - Manufacturing - - - 250 19 - Professional services - - - 239 10 - Property investment - - - 2,043 97 - Real estate - Mortgage - - - 42,069 1,784 - Personal - - - 272 5 - Government/public authorities - 1,527 2,225 1 - - Other commercial & industrial - - - 1,864 162 -	4,155 84 9 4,062 12 647 4 1 642 1 3,111 - - 3,111 - 954 31 - 923 14 269 - - 269 - 249 6 1 242 4 2,140 8 4 2,128 3 43,853 32 282 43,539 5 277 2 7 268 1 3,753 - - 3,753 - 2,026 18 21 1,987 6
Total gross credit risk 473 1,597 4,210 52,187 2,716 251 Securitisation exposures(1) - - 1,094 2,008 20 38	61,434 185 325 60,924 46 3,160 - 13 3,147 -
Total including Securitisation exposures 473 1,597 5,304 54,195 2,736 289 Impairment provision TOTAL	64,594 185 338 64,071 46
	(148) (46) (22) (80) 64,446 139 316 63,991

(1) The securitisation exposures of $2,008 million included under “Loans and advances” 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) “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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Table 4: Credit Risk (continued)

Table 4A: Credit risk by gross credit exposure – outstanding as at 30 September 2016

	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions $M $M $M $M $M $M $M $M $M $M $M	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions $M $M $M $M $M $M $M $M $M $M $M
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	- - - 3,972 193 - - - - 538 150 - 579 120 2,159 95 231 245 - - - 914 41 - - - - 257 17 - - - - 247 10 - - - - 2,012 81 - - - - 41,776 1,365 - - - - 288 6 - - 1,526 2,252 1 - - - - - 1,825 154 -	4,165 113 13 4,039 19 688 10 - 678 6 3,429 - - 3,429 - 955 33 - 922 13 274 - - 274 - 257 7 2 248 4 2,093 5 5 2,083 2 43,141 29 300 42,812 4 294 4 8 282 3 3,779 - - 3,779 - 1,979 19 22 1,938 10
Total gross credit risk Securitisation Exposures(1)	579 1,646 4,411 51,925 2,248 245 - - 912 2,155 21 8	61,054 220 350 60,484 61 3,096 - 11 3,085 -
Total including Securitisation Exposures Impairment provision TOTAL	579 1,646 5,323 54,080 2,269 253	64,150 220 361 63,569 61 (164) (61) (23) (80)
		63,986 159 338 63,489

(1) The securitisation exposures of $2,155 million included under “Loans and advances” 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) “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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Table 4: Credit Risk (continued)

Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 October to 31 December 2016

Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk $M $M $M $M $M $M $M	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk $M $M $M $M $M $M $M
	$M
Agribusiness - - - 3,953 208 - Construction & development - - - 530 138 - Financial services 526 95 2,072 94 236 248 Hospitality - - - 909 46 - Manufacturing - - - 254 18 - Professional services - - - 243 10 - Property investment - - - 2,028 89 - Real estate - Mortgage - - - 41,923 1,575 - Personal - - - 280 6 - Government/public authorities - 1,527 2,239 1 - - Other commercial & industrial - - - 1,845 158 -	4,161 668 3,271 955 272 253 2,117 43,498 286 3,767 2,003
Total gross credit risk 526 1,622 4,311 52,060 2,484 248 Securitisation exposures(1) - - 1,003 2,082 21 23	61,251 3,129
Total including Securitisation exposures 526 1,622 5,314 54,142 2,505 271 Impairment provision TOTAL	64,380
	(156)
	64,224

(1) The securitisation exposures of $2,082 million included under “Loans and advances” 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) “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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Table 4: Credit Risk (continued)

Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 July to 30 September 2016

	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk	Receivables due from other Banks (2) Trading Securities Investment Securities Loans and Advances Credit Commitments (3) Derivative Instruments (3) Total Credit Risk
	$M $M $M $M $M $M	$M
Agribusiness Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	- - - 3,962 190 -	4,152
	- - - 533 138 -	671
	565 159 2,080 94 202 227	3,327
	- - - 908 39 -	947
	- - - 267 19 -	286
	- - - 250 11 -	261
	- - - 1,983 87 -	2,070
	- - - 41,869 1,517 -	43,386
	- - - 300 6 -	306
	- 1,412 2,270 - - -	3,682
	- - - 1,792 172 -	1,964
Total gross credit risk Securitisation Exposures(1)	565 1,571 4,350 51,958 2,381 227	61,052
	- - 925 2,232 22 9	3,188
Total including Securitisation Exposures Impairment provision TOTAL	565 1,571 5,275 54,190 2,403 236	64,240
		(164)
		64,076

(1) The securitisation exposures of $2,232 million included under “Loans and advances” 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) “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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Table 4: Credit Risk (continued)

Table 4B: Credit risk by portfolio – 31 December 2016

				Past Due		Charges for
	Gross	Average		Not		Specific
	Credit Risk	Gross	Impaired	Impaired >	Specific	Provisions &
	Exposure	Exposure	Assets	90 days	Provisions	Write Offs
	$M	$M	$M	$M	$M	$M
Claims secured against eligible residential
mortgages(1)	47,013	46,627	32	295	5	3
Other retail	277	286	2	7	1	-
Financial services	3,111	3,271	-	-	-	-
Government and public authorities	3,753	3,767	-	-	-	-
Corporate and other claims	10,440	10,429	151	36	40	(10)
Total	64,594	64,380	185	338	46	(7)

(1) $3,160 million, $3,129 million and $13 million has been included in Gross Credit Risk Exposure, Average Gross Exposure and Past due not impaired > 90 days respectively to include securitisation exposures.

Table 4B: Credit risk by portfolio – 30 September 2016

				Past Due		Charges for
	Gross	Average		Not		Specific
	Credit Risk	Gross	Impaired	Impaired >	Specific	Provisions &
	Exposure	Exposure	Assets	90 days	Provisions	Write Offs
	$M	$M	$M	$M	$M	$M
Claims secured against eligible residential
mortgages(1)	46,237	46,574	29	311	4	1
Other retail	294	306	4	8	3	2
Financial services	3,429	3,327	-	-	-	-
Government and public authorities	3,779	3,682	-	-	-	-
Corporate and other claims	10,411	10,351	187	42	54	12
Total	64,150	64,240	220	361	61	15

(1) $3,096 million, $3,188 million and $11 million has been included in Gross Credit Risk Exposure, Average Gross Exposure and Past due not impaired > 90 days respectively to include securitisation exposures.

Table 4C: General reserves for credit losses

	DEC-16	SEP-16
	$M	$M
Collective provision for impairment	102	103
Ineligible collectiveprovisions on Past Due not Impaired	(22)	(23)
Eligible collective provisions	80	80
Equityreserve for credit losses	85	86
General reserve for credit losses	165	166

16

APS330 as at 31 December 2016

SUNCORP BANK

Table 5: Securitisation Exposures

Table 5A: Summary of securitisation activity for the period

	Exposures Securitised Recognised Gain or(Loss)on Sale	Exposures Securitised Recognised Gain or(Loss)on Sale	Exposures Securitised Recognised Gain or(Loss)on Sale	Exposures Securitised Recognised Gain or(Loss)on Sale
	DEC-16	SEP-16	DEC-16	SEP-16
	$M $M $M $M
Residential mortgages	- - - -
Total exposures securitised during theperiod	- - - -

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

	DEC-16	SEP-16
Exposure type	$M	$M
Debt securities	1,094	912
Total on-balance sheet securitisation exposures	1,094	912

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

	DEC-16	SEP-16
Exposure type	$M	$M
Liquidity facilities	20	21
Derivative exposures	38	8
Total off-balance sheet securitisation exposures	58	29

17

APS330 as at 31 December 2016

SUNCORP BANK

Table 20: Liquidity Coverage Ratio Disclosure

	Total Unweighted Value (Average)	Total Weighted Value (Average)
	DEC-16 DEC-16
	$M $M
	Liquid assets, of which:
1 2 3	High-quality liquid assets (HQLA) 4,677 Alternative liquid assets (ALA) 3,896 Reserve Bank of New Zealand (RBNZ) securities -
4 5 6 7 8 9 10	Cash outflows Retail deposits and deposits from small business customers, of which: 19,127 1,492 stable deposits 14,808 740 less stable deposits 4,319 752 Unsecured wholesale funding, of which: 4,396 2,794 operational deposits (all counterparties) and deposits in networks for cooperative ~~b~~ ~~k~~ - - non-operational deposits (all counterparties) 3,952 2,350 unsecured debt 444 444
11	Secured wholesale funding 384
12 13 14 15 16 17	Additional requirements, of which 2,860 1,414 outflows related to derivatives exposures and other collateral requirements 1,271 1,271 outflows related to loss of funding on debt products 52 52 credit and liquidity facilities 1,536 91 Other contractual funding obligations 1,216 912 Other contingent funding obligations 10,696 812
18	Total cash outflows 7,808
19 20 21 22	Cash inflows Secured lending (e.g. reverse repos) (482) - Inflows from fully performing exposures 937 633 Other cash inflows 732 732
	Total cash inflows 1,187 1,365
		Total Adjusted Value
23 24 25	Total liquid assets 8,573
	Total net cash outflows 6,443
	Liquidity Coverage Ratio (%) 133

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.

18

APS330 as at 31 December 2016

SUNCORP BANK

APRA allows 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 $3.8 billion for the 2017 calendar year (2016 calendar year: $4.2 billion). The $3.9 billion disclosed as ‘Alternative liquid assets’ excludes the ‘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.

The main contributors to net cash outflows were modelled outflows associated with 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.

The daily average LCR for the quarter ended 31 December 2016 was 133.1% (in line with daily average LCR for the quarter ended 30 September 2016 of 132.9%). The increase in daily average cash outflows over the quarter was primarily driven by the maturity profile of domestic wholesale liabilities (including $1.1 billion covered bond in December) and an increase in obligations related to lending growth. This was partly offset by lower offshore short term wholesale maturities, with the decision to minimise maturities around US money market reforms. The high-quality liquid assets held over the quarter increased, in line with higher net cash outflow and in anticipation of the lower CLF.

19

APS330 as at 31 December 2016

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 risk weighted assets, as defined by
	APRA
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 stressed 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

20