AI assistant
SUNCORP GROUP LIMITED — Interim / Quarterly Report 2016
Nov 1, 2015
65879_rns_2015-11-01_b5327253-d625-4269-827d-f170673b742d.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
ASX announcement
==> picture [152 x 53] intentionally omitted <==
2 November 2015
Suncorp Bank APS330 Update
Suncorp Bank today provided its quarterly update on Bank assets, credit quality and capital as at 30 September 2015, as required under Australian Prudential Standard 330.
Suncorp Bank responded to an increasingly competitive low interest rate, low-growth market by remaining focused on strong credit quality and sustainable growth. Total lending assets grew by 2.0% to $53 billion and credit quality improved on all metrics.
Suncorp Bank CEO, John Nesbitt, said the improvement in credit quality demonstrated the Bank was realising the benefits of investment in risk management capability, culture and technology in operating under the Basel II Advanced Accreditation Program.
“These results demonstrate that the Bank’s Advanced Accreditation Program is already improving the way we do business,” Mr Nesbitt said.
Retail lending in the quarter increased by 2.9% to $43.4 billion, with 89% of new loans written at an 80% or less loan-to-value ratio. More than 75% of new home lending originated outside of Queensland, supporting its national growth targets. The Bank is targeting growth in its loan portfolio of between 1 and 1.3 times system.
“Commercial and small business lending decreased by 1.4%, and growth in agribusiness was impacted by seasonal conditions and increased competition within the Bank’s target segments,” Mr Nesbitt said.
Impairment losses decreased to $6 million, representing an annualised rate of 4 basis points of gross loans and advances. Gross impaired assets decreased 7.3% to $202 million, demonstrating the Bank’s focus on credit quality across all lending portfolios.
“The Bank continued to achieve key milestones during the September quarter in the delivery of key strategic projects and we are encouraged about the progress we’re making towards advanced accreditation,” Mr Nesbitt said.
The capital position of the Bank remained strong with Common Equity Tier 1 (CET1) ratio increasing to 8.86%, comfortably within the 8.50% to 9.00% target range, as at 30 September 2015.
ENDS
For more information contact:
Media: Vicky Power on 0421 238 020 Analysts/Investors: Mark Ley on 0411 139 134
Suncorp Group Ltd - ABN 66 145 290 124 – Level 28, 266 George Street, Brisbane, Qld, 4000 suncorpgroup.com.au
==> picture [384 x 187] intentionally omitted <==
ABN 66 145 290 124 Suncorp Group Limited Suncorp Bank APS330 for the quarter ended 30 September 2015
Release date: 2 November 2015
==> picture [234 x 81] intentionally omitted <==
APS330 for the quarter ended 30 September 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 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 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 2 November 2015. 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]
2
Suncorp Bank
APS330 for the quarter ended 30 September 2015
Table of contents
Basis of preparation .................................................................................................................................................... 2 Overview ....................................................................................................................................................................... 4 Outlook .......................................................................................................................................................................... 4 Loans, advances and other receivables ........................................................................................................................ 5 Retail lending ................................................................................................................................................................. 5 Business lending ........................................................................................................................................................... 5 Impairment losses on loans and advances .................................................................................................................... 6 Impaired assets ............................................................................................................................................................. 6 Non-performing loans .................................................................................................................................................... 7 Provision for impairment ................................................................................................................................................ 8 Appendix 1 – Suncorp Bank updated slide information .......................................................................................... 9 Appendix 2 – APS 330 tables.................................................................................................................................... 14 Appendix 3 – Definitions ........................................................................................................................................... 23
3
APS330 for the quarter ended 30 September 2015
Suncorp Bank
Overview
The Bank continues to demonstrate strong credit quality performance with improvements in all metrics.
Total lending assets grew $1.0 billion in the quarter to $53.0 billion, an increase of 2.0%.
Retail lending grew 2.9% to $43.4 billion. Strong geographic diversification outside the Bank’s traditional Queensland market over the quarter was underpinned by the strengthening of the Bank’s intermediated channel capability. The Bank continues its disciplined approach to investor lending and is well placed to meet its regulatory obligations in this portfolio.
Business lending declined 1.7% to $9.6 billion. The portfolio continues to be conservatively managed with a reduction in beef and sugar exposures during the quarter.
The Bank remains focused on acquiring quality lending assets in a low-interest rate, low credit growth environment and continues to pursue diversified, high quality growth in target segments.
Gross impaired assets decreased 7.3% to $202 million, representing 38 basis points (bps) of gross loans and advances. Impairment losses of $6 million for the quarter represent 4 bps (annualised) of gross loans and advances.
The Bank is realising the benefits of significant investment in risk management capability, culture and technology under the Basel II Advanced Accreditation program through the continued strengthening of the balance sheet and ongoing improvements in credit experience. Provision coverage remains appropriate given improvements in the credit quality of lending assets on the balance sheet.
The Bank’s Common Equity Tier 1 (CET1) ratio sits at 8.86%, comfortably within the 8.50% to 9.00% target range and appropriate given industry and regulatory developments. The Bank’s CET1 ratio decreased marginally over the quarter following payment of the dividend from Suncorp Bank to Suncorp Group Limited.
Outlook
The Bank continues to conservatively manage the balance sheet and credit quality provisioning in light of continued market volatility and emerging economic and trading conditions.
Delivering superior customer satisfaction outcomes relative to major peers and leveraging the Ignite program to deliver outstanding customer experiences are key areas of focus. Ignite is an enabler for the Bank’s strategic direction through the benefits it is providing in the areas of simplification, flexibility, automation, data quality, cost reduction and sustainability and remains on track for completion by the end of financial year 2016.
Engagement with APRA regarding Basel II Advanced Accreditation is ongoing. The Bank is operating as an Advanced Bank with models in use across the business.
The Bank remains on track to deliver against its medium-term operating targets:
-
sustainable retail lending growth of 1 to 1.3 times system;
-
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;
-
net interest margin of 1.75% to 1.85%;
-
impairment losses of 10 to 20 bps of gross loans and advances;
-
disciplined cost management and ongoing investment in strategic programs to support a cost to income ratio of sub-50%; and
-
return on CET1 of 12.5% to 15%.
4
Suncorp Bank
APS330 for the quarter ended 30 September 2015
Loans, advances and other receivables
| SEP-15 SEP-15 QUARTER ENDED |
|
|---|---|
| SEP-15 JUN-15 SEP-14 vs JUN-15 vs SEP-14 $M $M $M % % |
|
| Housing loans Securitised and covered bondhousingloans |
36,657 34,977 32,777 4.8 11.8 6,354 6,808 6,039 (6.7) 5.2 |
| Total housing loans Consumer loans |
43,011 41,785 38,816 2.9 10.8 365 380 413 (3.9) (11.6) |
| Retail loans | 43,376 42,165 39,229 2.9 10.6 |
| Commercial (SME) Agribusiness |
5,277 5,353 5,692 (1.4) (7.3) 4,313 4,400 4,575 (2.0) (5.7) |
| Total Businesslending | 9,590 9,753 10,267 (1.7) (6.6) |
| Total lending | 52,966 51,918 49,496 2.0 7.0 |
| Other receivables | 12 25 41 (52.0) (70.7) |
| Gross banking loans, advances and other receivables 52,978 51,943 49,537 2.0 6.9 Provision for impairment (191) (208) (224) (8.2) (14.7) |
|
| Loans, advances and other receivables 52,787 51,735 49,313 2.0 7.0 |
|
| Credit risk weighted assets 25,740 25,487 25,625 1.0 0.4 |
|
| Geographical breakdown - Total lending Queensland 28,828 28,792 28,362 0.1 1.6 |
|
| New South Wales 13,231 12,773 11,958 3.6 10.6 Victoria 5,230 5,012 4,470 4.3 17.0 Western Australia 3,696 3,468 3,134 6.6 17.9 South Australia and other 1,981 1,873 1,572 5.8 26.0 |
|
| Outside ofQueenslandloans 24,138 23,126 21,134 4.4 14.2 |
|
| Total lending 52,966 51,918 49,496 2.0 7.0 |
Retail lending
The home lending portfolio grew 2.9% to $43.0 billion during the quarter. The Bank continues to drive improvement in the quality of the mortgage portfolio underpinned by the introduction of strengthened customer serviceability criteria in response to the low interest rate environment. Further, 89% of new loans written over the quarter had a loan-to-valuation ratio of 80% or less.
The Bank’s strong relationship with intermediaries remains integral to enhancing portfolio diversification outside of traditional Queensland markets. Over 75% of home lending portfolio growth during the quarter originated outside of Queensland.
Business lending
Commercial (SME)
The commercial (SME) portfolio contracted 1.4% to $5.3 billion during the quarter. The result was a reflection of intense price competition within the Bank’s target segments and risk selection informed by improved risk modelling capabilities. The Bank continues to pursue lending growth in target market segments.
5
APS330 for the quarter ended 30 September 2015
Suncorp Bank
Agribusiness
The agribusiness portfolio decreased 2.0% to $4.3 billion during the quarter. Growth was impacted by seasonal cropping and livestock receipts. The Bank continues to exercise care and caution with its approach to risk selection in this sector. Ongoing drought conditions across Queensland and Northern NSW continue to be monitored closely.
Impairment losses on loans and advances
| SEP-15 SEP-15 QUARTER ENDED |
|
|---|---|
| SEP-15 JUN-15 MAR- 15 vs JUN-15 vs MAR- 15 $M $M $M % % |
|
| Collective provision for impairment Specific provision for impairment Actual netwrite-offs |
- (11) (1) 8 (100.0) (100.0) 5 8 (2) 6 (37.5) (16.7) 1 2 2 (50.0) (50.0) |
| Total impairment losses | 6 (1) 16 (700.0) (62.5) |
| Impairment losses to gross loans and advances (annualised) 0.04% 0.11% 0.13% |
(1) Includes release of Agribusiness overlay provision of $4 million.
(2) Includes release of Agribusiness overlay provision of $7 million.
Impairment losses of $6 million for the quarter represents 4 bps (annualised) of gross loans and advances, well below the Bank’s 10 to 20 bps target operating range.
Impairment losses were limited to a small number of individual exposures across portfolio segments.
Provision coverage remains conservative and includes $8 million of the drought overlay originally introduced in June 2014.
Impaired assets
| Impaired assets | |
|---|---|
| SEP-15 SEP-15 QUARTER ENDED |
|
| SEP-15 JUN-15 MAR- 15 vs JUN-15 vs MAR- 15 $M $M $M % % |
|
| Retail lending Agribusiness lending Commercial/SME lending |
28 31 38 (9.7) (26.3) 119 125 151 (4.8) (21.2) 55 62 63 (11.3) (12.7) |
| Gross impaired assets Specific provision for impairment |
202 218 252 (7.3) (19.8) (65) (82) (94) (20.7) (30.9) |
| Net impaired assets | 137 136 158 0.7 (13.3) |
| Gross impaired assets togross loans and advances 0.38% 0.42% 0.48% |
Gross impaired assets decreased $16 million (7.3%) to $202 million during the quarter with improvements realised across all segments. This represents 0.38% of gross loans and advances demonstrating the Bank’s ongoing drive to improve credit quality across its lending portfolio.
Agribusiness impaired assets decreased $6 million over the quarter as some businesses benefited from improved market prices flowing from the weaker Australian dollar and improved weather conditions in some areas. The Bank continues to monitor emerging issues on an individual exposure basis.
6
Suncorp Bank
APS330 for the quarter ended 30 September 2015
Non-performing loans
| Non-performing loans | |
|---|---|
| SEP-15 SEP-15 QUARTER ENDED |
|
| SEP-15 JUN-15 MAR- 15 vs JUN-15 vs MAR- 15 $M $M $M % % |
|
| Gross balances of individually impaired loans Gross impaired assets Specific provision for impairment |
202 218 252 (7.3) (19.8) (65) (82) (94) (20.7) (30.9) |
| Net impaired assets | 137 136 158 0.7 (13.3) |
| Size of gross individually impaired assets Less than one million Greater than one million but less than ten million Greaterthanten million |
21 21 23 - (8.7) 110 115 132 (4.3) (16.7) 71 82 97 (13.4) (26.8) |
| 202 218 252 (7.3) (19.8) |
|
| Past due loans not shownas impaired assets | 367 399 399 (8.0) (8.0) |
| Gross non-performing loans | 569 617 651 (7.8) (12.6) |
| Analysis of movements in gross individually impaired assets Balance at the beginning of the period Recognition of new impaired assets Increases in previously recognised impaired assets Impaired assets written off/sold during the period Impaired assets which have been reclassed as performing assets or repaid |
218 252 262 (13.5) (16.8) 23 26 33 (11.5) (30.3) 1 1 3 - (66.7) (21) (18) (14) 16.7 50.0 (19) (43) (32) (55.8) (40.6) |
| Balance at the end of theperiod | 202 218 252 (7.3) (19.8) |
Gross non-performing loans decreased 7.8% to $569 million, representing 1.07% of gross loans and advances, with improvements across all segments.
Past due loans not shown as impaired assets decreased 8.0% to $367 million over the quarter, driven by a 10.3% decrease in the retail segment.
7
APS330 for the quarter ended 30 September 2015
Suncorp Bank
| Provision for impairment | SEP-15 SEP-15 QUARTER ENDED |
|---|---|
| SEP-15 JUN-15 MAR- 15 vs JUN-15 vs MAR- 15 $M $M $M % % |
|
| Collective provision Balance at the beginning of the period Charge against contribution toprofit |
126 137 129 (8.0) (2.3) - (11) 8 (100.0) (100.0) |
| Balance at the end of theperiod | 126 126 137 - (8.0) |
| Specific provision Balance at the beginning of the period Charge against impairment losses Write-off of impaired assets Unwind of interest |
82 94 104 (12.8) (21.2) 5 8 6 (37.5) (16.7) (21) (18) (14) 16.7 50.0 (1) (2) (2) (50.0) (50.0) |
| Balance at the end ofthe period | 65 82 94 (20.7) (30.9) |
| Total provision for impairment | 191 208 231 (8.2) (17.3) |
| Equity reserve for credit loss Balance at the beginning of the period Transfertoretained earnings |
146 142 144 2.8 1.4 (1) 4 (2) (125.0) (50.0) |
| Balance at the end ofthe period | 145 146 142 (0.7) 2.1 |
| Pre-taxequivalent coverage | 207 209 203 (1.0) 2.0 |
| Total provision for impairment and equity reserve for credit loss |
398 417 434 (4.6) (8.3) |
| % % % 0.24 0.24 0.26 0.12 0.16 0.18 0.36 0.40 0.44 0.39 0.40 0.39 0.75 0.80 0.83 32.2 37.6 37.3 |
|
| Provision for impairment expressed as a percentage of gross loans and advances Collective provision Specific provision Total provision Equity reserve for credit loss coverage Totalprovision and equityreserve for credit loss coverage |
|
| Specific provision expressed as a percentage of gross impaired assets |
| Equity reserve | Total provision |
|||||
|---|---|---|---|---|---|---|
| SEP-15 | 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 | 297 | 28 | 6 | 29 | 62 | 29.8 |
| Agribusiness lending | 46 | 119 | 26 | 52 | 75 | 92.7 |
| Commercial/SME lending | 24 | 55 | 33 | 45 | 70 | 187.3 |
| Total | 367 | 202 | 65 | 126 | 207 | 69.9 |
Consistent with operating as an Advanced Bank, a new collective provision model has been implemented inclusive of a new model overlay.
8
Suncorp Bank
APS330 for the quarter ended 30 September 2015
Appendix 1 – Suncorp Bank updated slide information
==> picture [469 x 264] intentionally omitted <==
==> picture [469 x 264] intentionally omitted <==
APS330 for the quarter ended 30 September 2015
Suncorp Bank
==> picture [469 x 264] intentionally omitted <==
==> picture [469 x 264] intentionally omitted <==
10
Suncorp Bank
APS330 for the quarter ended 30 September 2015
==> picture [469 x 263] intentionally omitted <==
==> picture [469 x 264] intentionally omitted <==
11
APS330 for the quarter ended 30 September 2015
Suncorp Bank
==> picture [469 x 264] intentionally omitted <==
==> picture [469 x 263] intentionally omitted <==
12
Suncorp Bank
APS330 for the quarter ended 30 September 2015
==> picture [469 x 264] intentionally omitted <==
==> picture [469 x 264] intentionally omitted <==
13
APS330 for the quarter ended 30 September 2015
Suncorp Bank
Appendix 2 – APS 330 tables
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
- 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.
14
Suncorp Bank
APS330 for the quarter ended 30 September 2015
TABLE 3: CAPITAL ADEQUACY
| CARRYING VALUE | AVG RISK WEIGHT |
RISK-WEIGHTED ASSETS |
|
|---|---|---|---|
| SEP-15 JUN-15 SEP-15 SEP-15 JUN-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 |
668 596 1 8 10 2,497 2,442 - - - 3,180 3,289 21 654 674 955 1,047 20 191 209 40,393 38,965 38 15,446 15,035 499 538 92 460 473 491 511 80 393 412 8,371 8,451 100 8,351 8,433 238 242 100 237 241 |
||
| Total Banking assets | 57,292 56,081 45 25,740 25,487 |
| NOTIONAL AMOUNT |
CREDIT EQUIVALENT |
AVG RISK WEIGHT |
RISK-WEIGHTED ASSETS |
RISK-WEIGHTED ASSETS |
|
|---|---|---|---|---|---|
| SEP-15 | SEP-15 | SEP-15 | SEP-15 | JUN-15 | |
| $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 |
274 273 69 188 196 7,828 2,065 51 1,050 1,229 5,964 279 15 42 53 50,656 94 40 38 48 2,775 42 86 36 39 - - - 112 108 |
||||
| Total off-balance sheetpositions | 67,497 2,753 53 1,466 1,673 |
||||
| Market risk capital charge Operational risk capital charge Total off-balance sheet positions Total on-balance sheet credit risk-weighted assets |
128 172 3,278 3,278 1,466 1,673 25,740 25,487 |
||||
| Total assessed risk | 30,612 30,610 |
||||
| Risk-weighted capital ratios | % % |
||||
| Common Equity Tier 1 Tier 1 Tier 2 |
8.86 9.13 10.33 10.60 3.22 3.23 |
||||
| Total risk-weighted capital ratio | 13.55 13.83 |
15
APS330 for the quarter ended 30 September 2015
Suncorp Bank
TABLE 4: CREDIT RISK
Table 4A: Credit risk by gross credit exposure – outstanding as at 30 September 2015
| RECEIV ABLES DUE FROM OTHER BANKS ( 2 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 4 ) DERIV ATIV E INSTRUM ENTS ( 4 ) |
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 |
| - - - 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.
16
APS330 for the quarter ended 30 September 2015
Suncorp Bank
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – outstanding as at 30 June 2015
| RECEIV ABLES DUE FROM OTHER BANKS ( 2 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 4 ) DERIV ATIV E INSTRUM ENTS ( 4 ) |
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 |
| - - - 3,983 173 - |
4,156 111 21 4,024 27 |
|
| - - - 489 155 - |
644 15 - 629 8 |
|
| 595 1,384 5,198 334 216 356 |
8,083 - - 8,083 - |
|
| - - - 912 47 - |
959 25 3 931 16 |
|
| - - - 319 20 - |
339 14 3 322 11 |
|
| - - - 233 11 - |
244 7 1 236 2 |
|
| - - - 1,997 80 - |
2,077 3 6 2,068 3 |
|
| - - - 38,506 1,898 - |
40,404 21 323 40,060 4 |
|
| - - - 380 10 - |
390 - 8 382 - |
|
| - - - - - - |
- - - - - |
|
| - - - 1,722 109 - |
1,831 22 34 1,775 11 |
|
| Total gross credit risk Securitisation Exposures(1) |
595 1,384 5,198 48,875 2,719 356 |
59,127 218 399 58,510 82 |
| - - 1,047 3,294 32 15 |
4,388 - - 4,388 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
595 1,384 6,245 52,169 2,751 371 |
63,515 218 399 62,898 82 |
| (208) (82) (27) (99) |
||
| 63,307 136 372 62,799 |
(1) The securitisation exposures of $3,294 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.
17
APS330 for the quarter ended 30 September 2015
Suncorp Bank
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 July to 30 September 2015
| RECEIV ABLES DUE FROM OTHER BANKS ( 2 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 4 ) DERIV ATIV E INSTRUM ENTS ( 4 ) |
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 |
| - - - 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.
18
APS330 for the quarter ended 30 September 2015
Suncorp Bank
TABLE 4: CREDIT RISK (continued)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 April to 30 June 2015
| RECEIV ABLES DUE FROM OTHER BANKS ( 2 ) TRADING SECURITIES INV ESTM ENT SECURITIES LOANS, ADV ANCES AND OTHER RECEIV ABLES ( 3 ) CREDIT COM M ITM ENTS ( 4 ) DERIV ATIV E INSTRUM ENTS ( 4 ) |
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 |
| - - - 4,018 161 - |
4,179 125 24 4,030 35 |
|
| - - - 509 147 - |
656 18 - 638 9 |
|
| 580 1,753 5,364 291 210 410 |
8,608 - - 8,608 - |
|
| - - - 931 50 - |
981 25 2 954 14 |
|
| - - - 328 18 - |
346 15 7 324 11 |
|
| - - - 240 10 - |
250 8 1 241 2 |
|
| - - - 1,954 76 - |
2,030 5 4 2,021 5 |
|
| - - - 38,308 1,806 - |
40,114 23 322 39,769 4 |
|
| - - - 386 10 - |
396 - 7 389 - |
|
| - - - - - - |
- - - - - |
|
| - - - 1,774 105 - |
1,879 17 32 1,830 8 |
|
| Total gross credit risk Securitisation Exposures(1) |
580 1,753 5,364 48,739 2,593 410 |
59,439 236 399 58,804 88 |
| - - 1,044 3,416 33 17 |
4,510 - - 4,510 - |
|
| Total including Securitisation Exposures Impairment provision TOTAL |
580 1,753 6,408 52,155 2,626 427 |
63,949 236 399 63,314 88 |
| (220) (88) (29) (103) |
||
| 63,729 148 370 63,211 |
(1) The securitisation exposures of $3,416 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.
19
Suncorp Bank
APS330 for the quarter ended 30 September 2015
TABLE 4: CREDIT RISK (continued)
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 4B: Credit risk by portfolio – 30 June 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 ** |
40,405 40,115 21 323 4 2 |
|
| 391 396 - 8 - 2 | |
| 8,081 8,607 - - - - | |
| - - - - - - | |
| 10,250 10,321 197 68 78 6 | |
| Total | 59,127 59,439 218 399 82 10 |
Table 4C: General reserves for credit losses
| SEP-15 JUN-15 |
|
|---|---|
| Collective provision for impairment Ineligible collectiveprovisions onpast due not impaired |
$M $M |
| 126 126 |
|
| (29) (27) |
|
| Eligible collective provisions Equityreserve for credit losses |
97 99 |
| 145 146 |
|
| General reserve for credit losses | 242 245 |
20
Suncorp Bank
APS330 for the quarter ended 30 September 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 | |
|---|---|---|---|---|
| SEP-15 | JUN-15 | SEP-15 | JUN-15 | |
| $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-15 JUN-15 $M $M |
JUN-15 |
| Debt securities | 955 1,047 |
|
| Total on-balance sheet securitisation exposures | 955 1,047 |
Table 5B(ii): Aggregate of off-balance sheet securitisation exposures by exposure type
| PRINCIPAL OR NOTIONAL EXPOSURE PRINCIPAL OR NOTIONAL EXPOSURE |
PRINCIPAL OR NOTIONAL EXPOSURE PRINCIPAL OR NOTIONAL EXPOSURE |
|
|---|---|---|
| Exposure type | SEP-15 JUN-15 $M $M |
JUN-15 |
| Liquidity facilities Derivative exposures |
59 64 2,716 2,909 |
|
| Total off-balance sheet securitisation exposures | 2,775 2,973 |
21
Suncorp Bank
APS330 for the quarter ended 30 September 2015
TABLE 18: REMUNERATION DISCLOSURES
Table 18: Remuneration disclosures for the year ended 30 June 2015 are set out in a separate document “APS330 Disclosure (Remuneration) – September 2015” and included with the Group’s prudential disclosures for the quarter ended 30 September 2015.
22
Suncorp Bank
APS330 for the quarter ended 30 September 2015
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 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 |
| 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 | |
| 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 |
| 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 | Bank credit risk-weighted assets, off-balance sheet positions, market |
| risk capital charge and operational risk charge, as defined by APRA |
23