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SUNCORP GROUP LIMITED — Interim / Quarterly Report 2015
Nov 9, 2014
65879_rns_2014-11-09_87856f74-2870-4930-a2b9-390ce732bda1.pdf
Interim / Quarterly Report
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ASX announcement
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10 November 2014
SUNCORP BANK IMPROVES MARGIN, CREDIT QUALITY AND CAPITAL IN THE SEPTEMBER QUARTER
Suncorp today provided an update on Bank assets, credit quality and capital as at 30 September 2014, as required under Australian Prudential Standard 330.
Suncorp Bank has responded to an increasingly competitive mortgage lending market by focusing on credit quality and the net interest margin. Both have improved significantly over the quarter with impaired loans down 15.6% and the net interest margin increasing to the top of the target range of 1.75% to 1.85%. In addition, common equity tier one has increased to 8.7% at 30 September 2014.
Total lending reduced 0.9% over the quarter due to prudent and targeted mortgage lending in a low-rate environment, lower system growth in Suncorp Bank’s target segments, the planned exit of a large commercial exposure and ongoing customer deleveraging.The Bank expects to return to growth in the December quarter.
Suncorp Bank CEO John Nesbitt said: “Suncorp has had a strong focus on strengthening risk management in line with the Basel II Advanced Accreditation program. We have been successful in the September quarter in improving the quality and diversification of our lending assets. Importantly, we have a strong pipeline of profitable, low-risk lending that has re-positioned Suncorp Bank for growth in the December quarter.”
Impairment losses reduced to $20 million or 16 basis points of gross loans, within the target range of 10 to 20 basis points. Impaired assets reduced 15.6% to $281 million and past-due loans reduced 3.6% to $423 million. A conservative approach to provisioning resulted in an increase in the total provision coverage against impaired assets to 79.7% from 67.9%.
Mr Nesbitt said Suncorp maintained a prudent approach to credit quality given the challenging external environment.
“It was pleasing to see a significant reduction in impaired assets but given the ongoing drought across much of Queensland, Suncorp has maintained the additional drought overlay introduced in June,” he said.
“Suncorp Bank has also made good progress over the quarter in its other key project, the Banking Platform Replacement Program. This is on track to deliver benefits in the 2017 financial year.”
ENDS
For more information contact:
Media: Michelle Barry on 0402 892 789 Analysts/Investors: Mark Ley on 0411 139 134
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Suncorp Group Ltd - ABN 66 145 290 124 - GPO Box 1453, Brisbane QLD 4001 www.suncorpgroup.com.au
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ABN 66 145 290 124 Suncorp Group Limited Suncorp Bank APS330 for the quarter ended 30 September 2014 Release date: 10 November 2014
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APS330 for the quarter ended 30 September 2014
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 Capital Adequacy: Public Disclosure of Prudential Information.
Suncorp Bank is represented by Suncorp-Metway Limited and its subsidiaries. Suncorp-Metway Limited is an authorised deposit-taking institution 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 30 September 2014 (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 10 November 2014. 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 [email protected]
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
Table of contents
Basis of preparation .................................................................................................................................................... 2 Overview ................................................................................................................................................................... 4 Outlook ...................................................................................................................................................................... 4 Loans, advances and other receivables .................................................................................................................... 5 Retail Lending ........................................................................................................................................................... 5 Business Lending ...................................................................................................................................................... 6 Impairment losses on loans and advances ............................................................................................................... 6 Impaired assets ......................................................................................................................................................... 8 Past due loans (not shown as impaired) ................................................................................................................... 8 Provision for impairment ........................................................................................................................................... 9 Appendix 1 – Suncorp Bank updated slide information ........................................................................................ 10 Appendix 2 – APS 330 tables.................................................................................................................................... 16 Appendix 3 – Definitions ........................................................................................................................................... 23
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
Overview
Suncorp Bank’s September quarter results delivered improved returns as a result of a focus on improved risk management and an optimal funding profile following the repayment of the last tranche of expensive legacy Non-core Bank funding.
The Bank prioritised margin and credit quality over growth in an intensely competitive mortgage market. Suncorp’s key target markets of low loan to valuation ratio (LVR) owner-occupied lending were subdued and, particularly in Queensland, customer de-leveraging continued.
A short term consequence in the September quarter was a reduction in lending assets. Retail lending reduced 0.5% to $39.2 billion. Business lending reduced 2.4% or $257 million, primarily due to the exit of a large commercial Queensland exposure.
Credit quality improved on all key metrics during the September quarter. Impairment losses reduced to $20 million or 16 basis points (bps) (annualised) of gross loans and advances. Gross impaired assets decreased 15.6% to $281 million, representing just 0.6% of gross loans and advances. The Bank is conservatively provisioned and has maintained the drought overlay introduced in the June quarter.
The Bank’s Net Interest Margin (NIM) has increased to the top of its target range of 1.75% to 1.85% during the September quarter. This was a result of an improvement in the deposit mix and a reduction in the cost of term funding.
In conjunction with improved margin and credit quality, the Bank has taken the opportunity during this period of low growth to further improve the diversification and composition of its funding. In September, the Bank successfully issued £250 million in a three-year floating rate note into the European market. Additionally, in October, the Bank issued $950 million in a five-year covered bond transaction at 70 bps over 90 day BBSW.
In addition, the capital position of the Bank has been improved with the Common Equity Tier 1 (CET1) ratio increasing to 8.70% at 30 September 2014.
Outlook
The completion of a number of key growth initiatives is showing success, with the pipeline for new lending in the Bank’s chosen segments improving significantly in September and October. This will see the Bank return to growth in the December quarter.
In the short-term, the moderation in funding costs will result in the Bank’s NIM remaining at the top of the target range of 1.75% to 1.85%. Impairment losses should be in the range of 10 to 20 bps of gross loans and the Cost to Income ratio should be around 53% in the 2015 financial year.
Delivery of the Bank’s Platform Replacement Program (Project Ignite) and Basel II Advanced Accreditation programs remain key focuses. Both programs are on-track and will significantly change the way in which the Bank conducts business. They will enhance the Bank’s ability to meet the changing needs of customers within a robust risk management framework.
Despite an improvement in credit quality over the September quarter, the Agribusiness segment is still subject to widespread drought conditions and reduced property values. The provisioning overlay added in June 2014 remains on balance sheet and will be maintained into the December quarter.
Operating targets over the medium term remain unchanged. These are:
-
NIM of 1.75% to 1.85% underpinned by pricing discipline;
-
disciplined cost management and ongoing investment in strategic programs to drive the Cost to Income ratio towards 50% (53% in the 2015 financial year);
-
sustainable lending growth of 1 to 1.3 times system through measured expansion in housing and business markets supported by positive conversion of new customers to ‘connected customers’;
-
retail Deposit to Lending ratio of 60% to 70% supported by the Bank’s ability to leverage its A+/A1 credit rating to raise diverse wholesale funding; and
-
return on CET1 of 12% to 15%.
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
Loans, advances and other receivables
| SEP-14 | SEP-14 | ||||
|---|---|---|---|---|---|
| SEP-14 | JUN-14 | **SEP-13 ** | vs JUN-14 | vs SEP-13 | |
| $M | $M | $M | % | % | |
| Housing loans | 32,777 | 32,540 | 30,134 | 0.7 | 8.8 |
| Securitised and covered bondhousingloans | 6,039 | 6,461 | 7,441 | (6.5) | (18.8) |
| Total housing loans | 38,816 | 39,001 | 37,575 | (0.5) | 3.3 |
| Consumer loans | 413 | 431 | 452 | (4.2) | (8.6) |
| Retail loans | 39,229 | 39,432 | 38,027 | (0.5) | 3.2 |
| Commercial (SME) | 5,576 | 5,772 | 5,553 | (3.4) | 0.4 |
| Agribusiness | 4,575 | 4,624 | 4,389 | (1.1) | 4.2 |
| Total retailand business lending | 49,380 | 49,828 | 47,969 | (0.9) | 2.9 |
| Corporate and property | 116 | 128 | 395 | (9.4) | (70.6) |
| Total lending | 49,496 | 49,956 | 48,364 | (0.9) | 2.3 |
| Other receivables | 41 | 51 | 99 | (19.6) | (58.6) |
| Gross banking loans, advances and other receivables | 49,537 | 50,007 | 48,463 | (0.9) | 2.2 |
| Provision for impairment | (224) | (226) | (239) | (0.9) | (6.3) |
| Loans, advances and other receivables | 49,313 | 49,781 | 48,224 | (0.9) | 2.3 |
| Credit risk weighted assets | 25,625 | 25,903 | 24,944 | (1.1) | 2.7 |
| Geographical breakdown - Total lending | |||||
| Queensland | 28,362 | 28,748 | 28,257 | (1.3) | 0.4 |
| New South Wales | 11,958 | 12,095 | 11,320 | (1.1) | 5.6 |
| Victoria | 4,470 | 4,436 | 4,286 | 0.8 | 4.3 |
| Western Australia | 3,134 | 3,139 | 3,080 | (0.2) | 1.8 |
| South Australia and other | 1,572 | 1,538 | 1,421 | 2.2 | 10.6 |
| Outside ofQueenslandloans | 21,134 | 21,208 | 20,107 | (0.3) | 5.1 |
| Total lending | 49,496 | 49,956 | 48,364 | (0.9) | 2.3 |
Retail Lending
The retail lending portfolio contracted 0.5% to $39.2 billion during the September 2014 quarter. The Bank remains focused on improving the quality of the book by concentrating on the origination of sub-80% LVR loans, driving better quality business and more optimal use of capital.
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
Business Lending
Commercial (SME)
The Bank’s SME portfolio contracted $196 million or 3.4% to $5.6 billion. This was primarily due to the planned exit of a large exposure which was deemed outside the Bank’s core service proposition. Subdued market conditions and heightened competitor activity both remain headwinds to near term growth. Notwithstanding this, the Bank will continue to pursue diversified growth within target market segments.
Agribusiness
The Agribusiness portfolio decreased 1.1% to $4.6 billion during the quarter. Growth moderated against the prior quarter in line with long term seasonality. Ongoing drought in key regions provides a challenging near term outlook and the Bank remains focused on appropriate risk selection in the current environment.
Impairment losses on loans and advances
| SEP- 14 SEP- 14 QUARTER ENDED |
|
|---|---|
| SEP- 14 JUN- 14 MAR-14 vs JUN- 14 vs MAR-14 $M $M $M % % |
|
| Collective provision for impairment Specific provision for impairment Actual netwrite-offs |
2 13 10 (84.6) (80.0) 18 35 21 (48.6) (14.3) - 1 (1) (100.0) (100.0) |
| 20 49 30 (59.2) (33.3) |
|
| Impairment losses to gross loans and advances (annualised) |
0.16% 0.39% 0.24% 0.31% 0.76% 0.47% |
| Impairment losses to risk weighted assets(annualised) |
Impairment losses of $20 million or 16bps (annualised) of gross loans and advances were within the Bank’s target operating range of 10bps to 20bps.
The reduction in both the specific provision and collective provision charge reflect improvements in credit quality across the Bank’s lending portfolio.
Impairment losses are expected to remain at current levels given the challenging operating environment and ongoing economic uncertainty.
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
| SEP- 14 | SEP- 14 | ||||
|---|---|---|---|---|---|
| SEP- 14 | JUN- 14 | MAR-14 | vs JUN- 14 vs MAR-14 | ||
| $M | $M | $M | % | % | |
| Individually impaired loans | |||||
| Gross impaired assets | 281 | 333 | 485 | (15.6) | (42.1) |
| Specific provision for impairment | (102) | (106) | (112) | (3.8) | (8.9) |
| Net impaired assets | 179 | 227 | 373 | (21.1) | (52.0) |
| Size of gross individually impaired assets | |||||
| Less than one million | 25 | 22 | 32 | 13.6 | (21.9) |
| Greater than one million but less than ten million | 160 | 183 | 226 | (12.6) | (29.2) |
| Greaterthanten million | 96 | 128 | 227 | (25.0) | (57.7) |
| 281 | 333 | 485 | (15.6) | (42.1) | |
| Past due loans not shownas impaired assets | 423 | 439 | 478 | (3.6) | (11.5) |
| Gross non-performing loans | 704 | 772 | 963 | (8.8) | (26.9) |
| Analysis of movements in gross individually | |||||
| impaired assets | |||||
| Balance at the beginning of the period | 333 | 485 | 416 | (31.3) | (20.0) |
| Recognition of new impaired assets | 26 | 45 | 148 | (41.8) | (82.4) |
| Increases in previously recognised impaired assets | 2 | 1 | 3 | 57.7 | (33.3) |
| Impaired assets written off/sold during the period | (19) | (37) | (18) | (48.6) | 5.6 |
| Impaired assets which have been reclassed as | |||||
| performing assets or repaid | (61) | (161) | (64) | (62.1) | (4.7) |
| Balance at the end of theperiod | 281 | 333 | 485 | (15.7) | (42.1) |
| SEP- 14 | SEP- 14 | ||||
| SEP- 14 | JUN- 14 | MAR-14 | vs JUN- 14 vs MAR-14 | ||
| $M | $M | $M | % | % | |
| Gross balances of individually impaired loans | |||||
| Retail lending | 28 | 26 | 35 | 7.7 | (20.0) |
| Agribusiness lending | 163 | 208 | 210 | (21.6) | (22.4) |
| Commercial/SME lending | 48 | 51 | 117 | (5.9) | (59.0) |
| Corporate and property | 42 | 48 | 123 | (12.5) | (65.9) |
| Gross impaired assets | 281 | 333 | 485 | (15.6) | (42.1) |
| Specific provision for impairment | (102) | (106) | (112) | (3.8) | (8.9) |
| Net impaired assets | 179 | 227 | 373 | (21.1) | (52.0) |
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
Impaired assets
Gross impaired assets decreased $52 million or 15.6% to $281 million. Agribusiness impaired assets declined $45 million to $163 million, representing 3.6% of the portfolio. The reduction in impaired Agribusiness loans was driven by the final resolution of eight exposures. Impaired balances in the commercial (SME) and home lending portfolios reduced $3 million and $4 million respectively.
The number of impaired loan accounts remains relatively low despite the prolonged drought impacting the agribusiness sector. The Bank continues to closely monitor emerging issues on an individual exposure basis.
Past due loans (not shown as impaired)
Past due loans not shown as impaired decreased $16 million or 3.6% to $423 million. The result was driven by $45 million reduction in housing past due volumes to $313 million. This represents just 0.81% of the housing portfolio. Balances increased for agribusiness due to the ongoing drought conditions, whilst SME overdrafts contributed to a small increase in the Commercial (SME) portfolio.
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
Provision for impairment
| Provision for impairment | |||||
|---|---|---|---|---|---|
| SEP- 14 | SEP- 14 | ||||
| SEP- 14 | JUN- 14 | MAR-14 | vs JUN- 14 vs MAR-14 | ||
| $M | $M | $M | % | % | |
| Collective provision | |||||
| Balance at the beginning of the period | 120 | 107 | 97 | 12.1 | 23.7 |
| Charge against contributionto profit | 2 | 13 | 10 | (84.6) | (80.0) |
| Balance at the end ofthe period | 122 | 120 | 107 | 1.7 | 14.0 |
| Specific provision | |||||
| Balance at the beginning of the period | 106 | 112 | 113 | (5.4) | (6.2) |
| Charge against impairment losses | 18 | 35 | 21 | (48.6) | (14.3) |
| Write-off of impaired assets | (19) | (37) | (18) | (48.6) | 5.6 |
| Unwind of interest | (3) | (4) | (4) | (25.0) | (25.0) |
| Balance at the end ofthe period | 102 | 106 | 112 | (3.8) | (8.9) |
| Total provision for impairment - Banking | |||||
| activities | 224 | 226 | 219 | (0.9) | 2.3 |
| Equity reserve for credit loss | |||||
| Balance at the beginning of the period | 151 | 116 | 125 | 30.2 | 20.8 |
| Transfertoretained earnings | (2) | 35 | (9) | (105.7) | (77.8) |
| Balance at the end ofthe period | 149 | 151 | 116 | (1.3) | 28.4 |
| Pre-taxequivalent coverage | 213 | 216 | 166 | (1.4) | 28.5 |
| Total provision for impairment and equity reserve | |||||
| for credit loss - Banking activities | 437 | 442 | 385 | (1.1) | 13.6 |
| % | % | % | |||
| Provision for impairment expressed as a | |||||
| percentage of gross impaired assets are as | |||||
| follows: | |||||
| Collective provision | 43.4 | 36.0 | 22.1 | ||
| Specific provision | 36.3 | 31.8 | 23.1 | ||
| Total provision | 79.7 | 67.9 | 45.2 | ||
| Equity reserve for credit loss coverage | 75.8 | 64.9 | 34.2 | ||
| Total provision and equity reserve for credit loss | |||||
| coverage | 155.5 | 132.7 | 79.3 |
Total provision coverage increased to 156% of gross impaired assets. Provision coverage remains conservative and includes the additional drought overlay introduced in June 2014.
| Equity reserve | Total provision |
|||||
|---|---|---|---|---|---|---|
| Sep-14 | Past due | Impaired | Specific | Collective | for credit loss (pre-tax |
coverage to gross non- |
| loans | assets | provision | provision | equivalent) | performing loans | |
| $M | $M | $M | $M | $M | % | |
| Retail lending | 321 | 28 | 6 | 31 | 59 | 27.5 |
| Agribusiness lending | 41 | 163 | 58 | 49 | 78 | 90.7 |
| Commercial/SME lending | 61 | 48 | 17 | 38 | 71 | 115.6 |
| Corporate andproperty | - | 42 | 21 | 4 | 5 | 71.4 |
| Total | 423 | 281 | 102 | 122 | 213 | 62.1 |
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
Appendix 1 – Suncorp Bank updated slide information
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
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APS330 for the quarter ended 30 September 2014
Suncorp Bank
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Suncorp Bank
APS330 for the quarter ended 30 September 2014
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APS330 for the quarter ended 30 September 2014
Appendices
Appendix 2 - APS 330 tables
TABLE 3: CAPITAL ADEQUACY
| CARRYING VALUE | AVG RISK WEIGHT |
RISK-WEIGHTED ASSETS |
|
|---|---|---|---|
| SEP-14 JUN-14 SEP-14 SEP-14 JUN-14 $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 |
684 723 0 3 2 2,261 1,733 - 0 - 4,710 4,162 21 984 891 1,153 1,208 20 231 242 36,522 36,494 40 14,450 14,553 624 673 96 601 631 |
||
| Other retail assets | 573 568 81 466 458 |
||
| Corporate Other assets and claims |
8,752 8,961 100 8,734 8,942 159 186 98 156 184 |
||
| Total Banking assets(1) | 55,438 54,708 46 25,625 25,903 |
(1) Total Banking assets differ from Banking segment assets due to the adoption of APRA classification of intangible assets, deferred tax, incorporation of trading book in the market risk capital charge and general reserve for credit losses for capital adequacy purposes.
| NOTIONAL AMOUNT |
CREDIT EQUIVALENT |
AVG RISK WEIGHT |
RISK-WEIGH |
TED ASSETS | |
|---|---|---|---|---|---|
| SEP-14 | SEP-14 | SEP-14 | SEP-14 | ||
| 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 |
302 299 70 210 208 7,291 1,770 55 970 975 6,199 282 26 73 56 61,849 150 55 82 93 3,006 38 87 33 36 - - - 141 128 |
||||
| Total off-balance sheetpositions | 78,646 2,539 59 1,509 1,496 |
||||
| Market risk capital charge Operational risk capital charge Total on-balance sheet credit risk-weighted assets |
221 333 3,265 3,265 25,625 25,903 |
||||
| Total Assessed Risk | 30,620 30,997 |
||||
| Risk-weighted capital ratios | % % |
||||
| Common Equity Tier 1 Tier 1 Tier 2 |
8.70 8.53 10.18 9.99 3.20 3.15 |
||||
| Total risk-weighted capital ratio | 13.38 13.14 |
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Appendices
APS330 for the quarter ended 30 September 2014
TABLE 4: CREDIT RISK
Table 4A: Credit risk by gross credit exposure – outstanding as at 30 September 2014
| RECEIV ABLES DUE FROM OTHER BANKS ( 4 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 2 ) DERIV ATIV E INSTRUM ENTS ( 2 ) |
TOTAL CREDIT RISK IM PAIRED ASSETS PAST DUE NOT IM PAIRED > 9 0 DAY S TOTAL NOT PAST DUE OR IM PAIRED SPECIFIC PROV 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 |
| - - - 4,245 200 - |
4,445 155 25 4,265 48 |
|
| - - - 668 168 - |
836 29 5 802 11 |
|
| 676 1,499 5,672 248 188 432 |
8,715 - - 8,715 - |
|
| - - - 1,091 46 - |
1,137 33 1 1,103 14 |
|
| - - - 398 29 - |
427 12 15 400 10 |
|
| - - - 279 10 - |
289 10 1 278 2 |
|
| - - - 1,405 78 - |
1,483 2 15 1,466 - |
|
| - - - 35,935 1,226 - |
37,161 18 313 36,830 4 |
|
| - - - 413 11 - |
424 - 8 416 - |
|
| - - - 1 - - |
1 - - 1 - |
|
| - - - 2,099 113 - |
2,212 22 40 2,150 13 |
|
| Total gross credit risk Securitisation Exposures(1) |
676 1,499 5,672 46,782 2,069 432 |
57,130 281 423 56,426 102 |
| - - 1,153 2,883 28 10 |
4,074 - - 4,074 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
676 1,499 6,825 49,665 2,097 442 |
61,204 281 423 60,500 102 |
| (224) (102) (31) (91) |
||
| 60,980 179 392 60,409 |
(1) The securitisation exposures of $2,883 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)
“Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.
(3) Total loans, advances and other receivables include receivables due from related parties.
(4) Receivables due from other Banks include collateral deposits provided to derivative counterparties.
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APS330 for the quarter ended 30 September 2014
Appendices
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – outstanding as at 30 June 2014
| RECEIV ABLES DUE FROM OTHER BANKS ( 4 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 2 ) DERIV ATIV E INSTRUM ENTS ( 2 ) |
TOTAL CREDIT RISK IM PAIRED ASSETS PAST DUE NOT IM PAIRED > 9 0 DAY S TOTAL NOT PAST DUE OR IM PAIRED SPECIFIC PROV 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 |
| - - - 4,269 172 - |
4,441 197 8 4,236 50 |
|
| - - - 606 142 - |
748 36 4 708 12 |
|
| 927 1,593 5,292 341 187 358 |
8,698 - - 8,698 - |
|
| - - - 1,002 60 - |
1,062 29 - 1,033 11 |
|
| - - - 364 24 - |
388 11 15 362 10 |
|
| - - - 258 10 - |
268 5 2 261 2 |
|
| - - - 1,995 81 - |
2,076 12 14 2,050 9 |
|
| - - - 35,844 1,237 - |
37,081 22 358 36,701 4 |
|
| - - - 431 10 - |
441 - 8 433 - |
|
| - - - 1 - - |
1 - - 1 - |
|
| - - - 1,939 109 - |
2,048 21 30 1,997 8 |
|
| Total gross credit risk Securitisation Exposures(1) |
927 1,593 5,292 47,050 2,032 358 |
57,252 333 439 56,480 106 |
| - - 1,208 3,103 30 12 |
4,353 - - 4,353 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
927 1,593 6,500 50,153 2,062 370 |
61,605 333 439 60,833 106 |
| (226) (106) (34) (86) |
||
| 61,379 227 405 60,747 |
(1) The securitisation exposures of $3,103 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)
“Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112. (3) Total loans, advances and other receivables include receivables due from related parties.
(4) Receivables due from other Banks include collateral deposits provided to derivative counterparties.
18
Appendices
APS330 for the quarter ended 30 September 2014
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 July to 30 September 2014
| RECEIV ABLES DUE FROM OTHER BANKS ( 4 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 2 ) DERIV ATIV E INSTRUM ENTS ( 2 ) |
TOTAL CREDIT RISK IM PAIRED ASSETS PAST DUE NOT IM PAIRED > 9 0 DAY S TOTAL NOT PAST DUE OR IM PAIRED SPECIFIC PROV 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 |
| - - - 4,257 186 - |
4,443 176 17 4,250 48 |
|
| - - - 637 155 - |
792 33 5 754 11 |
|
| 802 1,546 5,482 294 187 395 |
8,706 - - 8,706 - |
|
| - - - 1,047 53 - |
1,100 31 1 1,068 13 |
|
| - - - 381 27 - |
408 12 15 381 10 |
|
| - - - 269 10 - |
279 8 2 269 2 |
|
| - - - 1,700 80 - |
1,780 7 15 1,758 5 |
|
| - - - 35,890 1,232 - |
37,122 20 336 36,766 4 |
|
| - - - 422 11 - |
433 - 8 425 - |
|
| - - - 1 - - |
1 - - 1 - |
|
| - - - 2,019 111 - |
2,130 22 35 2,073 11 |
|
| Total gross credit risk Securitisation Exposures(1) |
802 1,546 5,482 46,917 2,052 395 |
57,194 309 434 56,451 104 |
| - - 1,181 2,993 29 11 |
4,214 - - 4,214 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
802 1,546 6,663 49,910 2,081 406 |
61,408 309 434 60,665 104 |
| (226) (104) (33) (89) |
||
| 61,182 205 401 60,576 |
(1) The securitisation exposures of $2,993 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) “Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.
(3) Total loans, advances and other receivables include receivables due from related parties.
(4) Receivables due from other Banks include collateral deposits provided to derivative counterparties
19
APS330 for the quarter ended 30 September 2014
Appendices
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 April to 30 June 2014
| RECEIV ABLES DUE FROM OTHER BANKS ( 4 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 2 ) DERIV ATIV E INSTRUM ENTS ( 2 ) |
TOTAL CREDIT RISK IM PAIRED ASSETS PAST DUE NOT IM PAIRED > 9 0 DAY S TOTAL NOT PAST DUE OR IM PAIRED SPECIFIC PROV 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 |
| - - - 4,228 175 - |
4,403 199 9 4,195 46 |
|
| - - - 625 147 - |
772 47 10 715 13 |
|
| 868 1,603 5,204 330 187 328 |
8,520 - - 8,520 - |
|
| - - - 996 52 - |
1,048 32 - 1,016 12 |
|
| - - - 378 21 - |
399 20 15 364 9 |
|
| - - - 260 11 - |
271 6 2 263 2 |
|
| - - - 2,007 84 - |
2,091 42 14 2,035 10 |
|
| - - - 35,578 1,267 - |
36,845 25 376 36,444 5 |
|
| - - - 439 11 - |
450 - 9 441 - |
|
| - - - 1 - - |
1 - - 1 - |
|
| - - - 1,959 117 - |
2,076 41 26 2,009 11 |
|
| Total gross credit risk Securitisation Exposures(1) |
868 1,603 5,204 46,801 2,072 328 |
56,876 412 461 56,003 108 |
| - - 1,269 3,231 32 13 |
4,545 - - 4,545 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
868 1,603 6,473 50,032 2,104 341 |
61,421 412 461 60,548 108 |
| (223) (109) (39) (75) |
||
| 61,198 303 422 60,473 |
(1) The securitisation exposures of $3,231 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) “Credit commitments” and “Derivative instruments” represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112.
(3) Total loans, advances and other receivables include receivables due from related parties.
(4) Receivables due from other Banks include collateral deposits provided to derivative counterparties.
20
Appendices
APS330 for the quarter ended 30 September 2014
TABLE 4: CREDIT RISK (continued)
Table 4B: Credit risk by portfolio – 30 September 2014
| GROSS CREDIT RISK EXPOSURE AVERAGE GROSS EXPOSURE IMPAIRED ASSETS PAST DUE NOT IMPAIRED > 90 DAYS SPECIFIC PROVISIONS CHARGES FOR SPECIFIC PROVISIONS & WRITE OFFS LOSSES ON DISPOSAL OF LOANS AND ADVANCES |
|
|---|---|
| Claims secured against eligible residential mortgages Other retail Financial services Government and public authorities Corporate and other claims |
$M $M $M $M $M $M **$M ** |
37,161 37,122 18 313 4 1 - |
|
| 424 433 - 8 - 2 - | |
| 8,715 8,706 - - - - - | |
| 1 1 - - - - - | |
| 10,829 10,932 263 102 98 15 - | |
| Total | 57,130 57,194 281 423 102 18 - |
Table 4B: Credit risk by portfolio – 30 June 2014
| GROSS CREDIT RISK EXPOSURE AVERAGE GROSS EXPOSURE IMPAIRED ASSETS PAST DUE NOT IMPAIRED > 90 DAYS SPECIFIC PROVISIONS CHARGES FOR SPECIFIC PROVISIONS & WRITE OFFS LOSSES ON DISPOSAL OF LOANS AND ADVANCES |
|
|---|---|
| Claims secured against eligible residential mortgages Other retail Financial services Government and public authorities Corporate and other claims |
$M $M $M $M $M $M **$M ** |
37,081 36,845 22 358 4 1 - |
|
| 441 450 - 8 - 2 - | |
| 8,698 8,520 - - - - - | |
| 1 1 - - - - - | |
| 11,031 11,060 311 73 102 33 - | |
| Total | 57,252 56,876 333 439 106 36 - |
Table 4C: General reserves for credit losses
| SEP-14 JUN-14 |
|
|---|---|
| Collective provision for impairment Ineligible Collective Provisions on Past Due not Impaired |
$M $M |
| 122 120 |
|
| (31) (34) |
|
| Eligible Collective Provisions EquityReserve for credit losses |
91 86 |
| 149 151 |
|
| General Reserve for Credit losses | 240 237 |
21
APS330 for the quarter ended 30 September 2014
Appendices
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 | |
|---|---|---|---|---|
| SEP-14 | JUN-14 | SEP-14 | JUN-14 | |
| $M $M $M $M |
||||
| Residential mortgages | - - - - |
|||
| Total exposures securitised during theperiod | - - - - |
Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type
| EXPOSURE | EXPOSURE | |
|---|---|---|
| Exposure type | SEP-14 JUN-14 $M $M |
|
| Debt securities | 1,153 1,208 |
|
| Total on-balance sheet securitisation exposures | 1,153 1,208 |
Table 5B(ii): Aggregate of off-balance sheet securitisation exposures by exposure type
| PRINCIPAL OR NOTIONAL EXPOSURE PRINCIPAL OR NOTIONAL EXPOSURE |
|
|---|---|
| Exposure type | SEP-14 JUN-14 $M $M |
| Liquidity facilities Derivative exposures |
56 60 2,950 3,180 |
| Total off-balance sheet securitisation exposures | 3,006 3,240 |
22
Appendices
APS330 for the quarter ended 30 September 2014
Appendix 3 – Definitions
| Capital adequacy ratio | Capital base divided by total assessed risk, as defined by APRA |
|---|---|
| Common Equity Tier 1 | Common Equity Tier 1 includes ordinary shareholder equity and |
| retained profits less tier 1 and tier 2 regulatory deductions | |
| Common equity tier 1 ratio | Common Equity tier 1 divided by total assessed risk |
| Deposit to loan ratio | Total retail deposits divided by total loans and advances, excluding |
| other receivables | |
| Equity reserve for credit | The equity reserve for credit losses represents the difference between |
| losses | the collective provisions for impairment and the estimate of credit |
| losses across the credit cycle based on guidance provided by APRA | |
| Gross non-performing | Gross impaired assets plus past due loans |
| loans | |
| Impairment losses to gross | Impairment losses on loans and advances divided by gross banking |
| loans and advances | loans, advances and other receivables |
| Impairment losses to risk | Impairment losses on loans and advances divided by risk weighted |
| weighted assets | assets |
| Past due | 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 | Risk weighted assets, off balance sheet positions and market risk |
| capital charge and operational risk charge, as defined by APRA |
23