SUNCORP GROUP LIMITED — Interim / Quarterly Report 2017

May 21, 2017

22 May 2017

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ASX announcement

Suncorp Bank APS330 Update

Suncorp Bank today provided its quarterly update on Bank assets, credit quality and capital as at 31 March 2017, as required under Australian Prudential Standard 330.

The home lending portfolio grew modestly over the quarter, reflecting challenging market conditions.

Suncorp Banking and Wealth CEO David Carter said the Bank continued to focus on targeted segments of the market, prioritising risk selection and quality, and was well positioned in its standing relative to regulatory changes.

“We responded early to signals by the regulators to improve our position in relation to changes to macro-prudential settings, particularly APRA’s interest-only and investor lending,” Mr Carter said.

“We have been deliberate in shaping the portfolio through our focus on risk selection and expect modest growth in home and business lending as our competitors align to more conservative positions.”

Business lending growth was flat, with strong new business volumes offset by repayments from successfully completed property developments and favourable conditions for agribusiness customers leading to repayment of loans.

Credit quality across Suncorp Bank’s business loan portfolio remains sound, with very little exposure to the higher risk lending segments of inner-city apartments and businesses affected by the resources industry slowdown.

The benefits of prudent risk management are reflected in the continued strong credit quality performance over the quarter, with impairment losses of $7 million, or 5 basis points of gross loans and advances (annualised).

The Bank’s funding strength was demonstrated during the quarter through the successful pricing of a $1.25 billion Residential Mortgage-Backed Security (RMBS) and an increase in the Net Stable Funding Ratio (NSFR) position, closing at 109%.

Following the payment of the interim FY17 dividend to Suncorp Group Limited, the Bank’s Common Equity Tier 1 (CET 1) ratio continues to be strong at 9.19% and remains above the target range of 8.5% to 9.0%.

Suncorp is also in the process of determining the impacts on the business, following several announcements in the Federal Budget impacting the financial services sector.

“Australia has a strong banking system and Suncorp supports the principles of the Financial Services Inquiry to achieve competitive neutrality,” Mr Carter said.

“The Treasurer announced two measures that have the potential to support competitive neutrality – the Bank levy and the harmonisation of supervision of the ADI and non-ADI sector.

“These measures have the potential to further improve the effectiveness of the macro prudential settings that have recently been introduced and will go some way to realising a more level playing field.”

Suncorp–Metway Limited - ABN 66 010 831 722 – Level 28, 266 George Street, Brisbane Qld 4000 suncorpgroup.com.au

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Ends

For more information contact:

Alexandra Foley Media 0419 794 294 Andrew Dempster Investors 0497 799 960

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Suncorp–Metway Limited - ABN 66 010 831 722 – Level 28, 266 George Street, Brisbane Qld 4000 suncorpgroup.com.au

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SUNCORP GROUP LIMITED ABN 66 145 290 124 SUNCORP BANK APS 330 for the quarter ended 31 March 2017 RELEASE DATE: 22 MAY 2017

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APS330 for the quarter ended 31 March 2017

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 March 2017 (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 22 May 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

Andrew Dempster Acting Head of Investor Relations Telephone: (02) 8121 9206 andrew.dempster@suncorp.com.au

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SUNCORP BANK

APS 330 for the quarter ended 31 March 2017

Table of contents

Basis of preparation .................................................................................................................................................... 2 Overview ...................................................................................................................................................................... 4 Outlook ......................................................................................................................................................................... 4 Loans and advances ................................................................................................................................................... 5 Retail lending ............................................................................................................................................................... 5 Business lending ......................................................................................................................................................... 6 Weather events ............................................................................................................................................................ 6 Impairment losses on loans and advances ............................................................................................................... 7 Impaired assets ........................................................................................................................................................... 7 Non-performing loans ................................................................................................................................................. 8 Provision for impairment ............................................................................................................................................ 9 Gross non-performing loans coverage by portfolio ............................................................................................... 10 Appendix 1 – APS 330 tables.................................................................................................................................... 11 Appendix 2 – Slide pack ........................................................................................................................................... 19 Appendix 3 – Definitions ........................................................................................................................................... 24

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Overview

Suncorp Bank has maintained responsible and sustainable lending practices in an operating environment experiencing ongoing economic, political and regulatory pressures. The Bank recognises the destruction caused by Cyclone Debbie in Queensland and Northern New South Wales and is focused on supporting customers through this difficult period.

The home lending portfolio grew modestly over the quarter, reflecting challenging market conditions. The Bank continued to focus on targeted segments of the market, prioritising risk selection and quality.

Business lending growth was flat, with strong new business volumes offset by repayments from successfully completed property developments and favourable conditions for agribusiness customers leading to repayment of loans. Credit quality across Suncorp Bank’s business loan portfolio remains sound, with a very small exposure to the higher risk lending segments of inner-city apartments and resources, with only a small number of businesses affected by downstream impacts from the resources industry slowdown.

Advanced risk management practices and models are continuously being enhanced across the Bank’s portfolios. The benefits of prudent risk management are reflected in the continued strong credit quality performance over the quarter. Impairment losses of $7 million or 5 basis points of gross loans and advances (annualised) remained below the expected operating range of 10 to 20 basis points and compares favourably to peers. Changes to operational processes relating to hardship were implemented, effective 1 January 2017, following guidance by APRA. There is no change to the risk profile of mortgages as a result of the operational changes, however, the impact of an increase in arrears reported are within the Bank’s expectations.

The Bank’s funding strength was demonstrated during the quarter through the successful pricing of a $1.25 billion Residential Mortgage-Backed Security (RMBS) and an increase in the Net Stable Funding Ratio (NSFR) position, closing at 109%.

Following the payment of the interim FY17 dividend to Suncorp Group, the Bank’s Common Equity Tier 1 ratio (CET1 ratio) continues to be strong at 9.19% and remains above the target range of 8.50% to 9.00%.

Outlook

A conservative approach to lending has positioned the Bank favourably within macro-prudential settings, including APRA’s interest-only and investor lending supervisory measures. Suncorp Bank has an opportunity to benefit from changes in competitor offerings as they align to more conservative settings and expects modest growth in both home lending and business lending portfolios.

The Bank will ensure appropriate returns on risk, supported by a continued focus on geographic and segment diversification. The Bank intends on maintaining its high credit quality standards and expects to benefit from continued low impairment losses.

The Bank maintains close engagement with customers to better understand and meet their needs, while also strengthening its core business through sustainable balance sheet growth, robust risk management, and ongoing process improvement. The Bank will continue to leverage and benefit from its significant investments in technology and capability over future periods.

Balance sheet growth is also supported through a sustainable and diversified funding base including growth across the stable deposit base (both at-call and term deposits), compliance with regulatory guidance on NSFR and liquidity metrics, and continuing efforts to lengthen the duration of wholesale funding.

The Bank will maintain its disciplined approach to monitoring and assessing the influence of weather conditions, industry wide impacts and changing macroeconomic conditions.

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Loans and advances

Loans and advances
	Quarter Ended			Mar-17	Mar-17
	Mar-17	Dec-16	Mar-16	vs Dec-16	vs Mar-16
	$M	$M	$M	%	%
Housing loans	37,881	38,743	36,750	(2.2)	3.1
Securitised housingloans and covered bonds	6,376	5,332	6,290	19.6	1.4
Total housing loans	44,257	44,075	43,040	0.4	2.8
Consumer loans	259	268	331	(3.4)	(21.8)
Retail loans	44,516	44,343	43,371	0.4	2.6
Commercial (SME)	5,479	5,462	5,227	0.3	4.8
Agribusiness	4,346	4,383	4,262	(0.8)	2.0
Total Business loans	9,825	9,845	9,489	(0.2)	3.5
Total lending	54,341	54,188	52,860	0.3	2.8
Other lending	11	7	11	57.1		-
Gross loans and advances	54,352	54,195	52,871	0.3	2.8
Provision for impairment	(148)	(148)	(167)	-	(11.4)
Total loans and advances	54,204	54,047	52,704	0.3	2.8
Credit-risk weighted assets	25,758	26,459	25,761	(2.6)	(0.0)
Geographical breakdown - Total lending
Queensland	28,869	28,935	28,701	(0.2)	0.6
New South Wales	14,046	13,925	13,171	0.9	6.6
Victoria	5,608	5,532	5,305	1.4	5.7
Western Australia	3,680	3,707	3,652	(0.7)	0.8
South Australia and other	2,138	2,089	2,031	2.3	5.3
Outside of Queensland loans	25,472	25,253	24,159	0.9	5.4
Total lending	54,341	54,188	52,860	0.3	2.8

Retail lending

The home lending portfolio grew over the quarter, with total housing loans closing at $44.3 billion. Suncorp Bank continues to optimise volume and margin to maintain profitable and sustainable lending practices. Targeted customer offerings are integral to the Bank’s growth strategy, with a strong focus on processing and turnaround efficiencies.

The Bank maintained a high quality lending portfolio as measured by serviceability, credit quality and loan to value ratios. Credit quality remained a priority with an increased focus on lending with strong credit attributes and a higher proportion of business on principal and interest terms. The Bank is well placed against current macro-prudential settings and has an opportunity to benefit as competitors adjust their customer offerings.

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Business lending

Commercial (SME)

The commercial (SME) portfolio experienced moderate growth of 0.3% to $5.5 billion during the quarter. The Bank remains focused on considered and disciplined growth within its risk appetite and continues to conservatively target growth within selected industry segments. Lending to inner-city apartment developments and customers affected by downstream impacts from the resources industry slowdown is low, well controlled and closely monitored. The Bank’s exposure to inner-city development finance reduced during the quarter to approximately $129 million, or 1.3% of the total business lending portfolio, as projects reached completion resulting in repayment of Bank debt. Projects that were completed over the past quarter have evidenced very low rates of buyers failing to settle. The Bank typically avoids projects with significant reliance on pre-sale to foreign investors and continues to focus on lending to developers with a strong track record in markets that are well understood by the Bank.

Agribusiness

The agribusiness portfolio contracted 0.8% to $4.3 billion during the quarter due to seasonal factors, as customers experienced favourable harvests and reduced their loan balances which was a positive development for the segment following several years of drought affected debt buildup. A clear risk appetite continues to guide decisions around new business, with the Bank pursuing diversified growth across regions and industries, targeting family operated farms and businesses.

Weather events

To date, there has been limited overall impact on the Bank from Cyclone Debbie and related weather events. The Bank is working with a small number of retail customers experiencing difficulty through the hardship process and is assisting a limited number of impacted business customers. Suncorp Bank is focused on supporting impacted customers and regions through financial relief packages and is anticipating an increase in hardship, home lending arrears, and impaired assets over the next quarter. The Bank recognises that some geographic areas have benefitted from the rainfall associated with the event which will positively impact farming activities in coming months.

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SUNCORP BANK

APS 330 for the quarter ended 31 March 2017

Impairment losses on loans and advances

	QUARTER ENDED	QUARTER ENDED		MAR-17	MAR-17
	MAR-17	DEC-16	MAR-16	vs DEC-16	vs MAR-16
	$M	$M	$M	%	%
Collective provision for impairment	-	(1)	(6)	(100.0)	(100.0)
Specific provision for impairment	4	(11)	8	n/a	(50.0)
Actual net write-offs	3	3	2	-	50.0
	7	(9)	4	n/a	n/a
Impairment losses to gross loans and
advances(annualised)	0.05%	-0.07%	0.03%

Impairment losses of $7 million represents 5 basis points (annualised) of gross loans and advances, below the expected operating range of 10 to 20 basis points.

The Bank considers that the current level of provisioning is appropriate including holding relevant and appropriate economic and operational overlays that will be re-evaluated at the end of the financial year.

Write offs for the quarter remained low and reflected the finalisation of files in both the Business and Retail Recovery portfolios.

Impaired assets

Impaired assets
	Quarter Ended			Mar-17	Mar-17
	Mar-17	Dec-16	Mar-16	vs Dec-16	vs Mar-16
	$M	$M	$M	%	%
Retail lending	30	30	23	-	30.4
Agribusiness lending	88	96	123	(8.3)	(28.5)
Commercial/SME lending	51	59	44	(13.6)	15.9
Gross impaired assets	169	185	190	(8.6)	(11.1)
Specificprovision for impairment	(46)	(46)	(54)	-	(14.8)
Net impaired assets	123	139	136	(11.5)	(9.6)
Gross impaired assets to gross loans and
advances	0.31%	0.34%	0.36%

Gross impaired assets decreased to $169 million, representing 31 basis points of gross loans and advances.

Retail lending impaired assets remained flat, and Commercial impairments reduced as improved trading and asset sales allowed for debt reduction and a return to performing status for a small number of files.

The continuing improvement in Agribusiness impairments was driven by favourable operating conditions with above average rainfall across most parts of Australia, strong commodity prices for legumes and beef, and a lower Australian Dollar.

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Non-performing loans

Non-performing loans
	Quarter Ended			Mar-17	Mar-17
	Mar-17	Dec-16	Mar-16	vs Dec-16	vs Mar-16
	$M	$M	$M	%	%
Gross balances of individually impaired loans
Gross impaired assets	169	185	190	(8.6)	(11.1)
Specificprovision for impairment	(46)	(46)	(54)	-	(14.8)
Net impaired assets	123	139	136	(11.5)	(9.6)
Size of gross individually impaired assets
Less than one million	30	26	19	15.4	57.9
Greater than one million but less than ten million	94	102	104	(7.8)	(9.6)
Greater than ten million	45	57	67	(21.1)	(32.8)
	169	185	190	(8.6)	(11.1)
Past due loans not shown as impaired assets	375	338	416	10.9	(9.9)
Gross non-performing loans	544	523	606	4.0	(10.2)
Analysis of movements in gross individually impaired
assets
Balance at the beginning of the period	185	220	176	(15.9)	5.1
Recognition of new impaired assets	10	17	46	(41.2)	(78.3)
Increases in previously recognised impaired assets	1	1	3	-	(66.7)
Impaired assets written off/sold during the period	(3)	(3)	(13)	-	(76.9)
Impaired assets which have been reclassed as
performingassets or repaid	(24)	(50)	(22)	(52.0)	9.1
Balance at the end of theperiod	169	185	190	(8.6)	(11.1)

Gross non-performing loans increased 4.0% over the quarter to $544 million, representing 100 basis points of gross loans and advances.

Past due loans that are not impaired increased 10.9% to $375 million for the quarter. This mainly related to higher home lending arrears, arising from seasonality and the change in hardship operational processes effective from January 2017, as previously indicated.

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Provision for impairment

Provision for impairment
	QUARTER ENDED			MAR-17	MAR-17
	MAR-17	DEC-16	MAR-16	vs DEC-16	vs MAR-16
	$M	$M	$M	%	%
Collective provision
Balance at the beginning of the period	102	103	119	(1.0)	(14.3)
Charge against impairment losses	-	(1)	(6)	(100.0)	(100.0)
Balance at the end of theperiod	102	102	113	-	(9.7)
Specific provision
Balance at the beginning of the period	46	61	60	(24.6)	(23.3)
Charge against impairment losses	4	(11)	8	n/a	(50.0)
Impairment provision written off	(3)	(3)	(13)	-	(76.9)
Unwind of discount	(1)	(1)	(1)	-	-
Balance at the end of theperiod	46	46	54	-	(14.8)
Totalprovision for impairment - Banking activities	148	148	167	-	(11.4)
Equity reserve for credit loss (ERCL)
Balance at the beginning of the period	85	86	96	(1.2)	(11.5)
Transfer(to)from retained earnings	(5)	(1)	(4)	400.0	25.0
Balance at the end of theperiod	80	85	92	(5.9)	(13.0)
Pre-tax equivalent coverage	114	121	131	(5.8)	(13.0)
Total provision for impairment and equity reserve for
credit loss - Banking activities	262	269	298	(2.6)	(12.1)
	%	%	%
Specific provision for impairment expressed as a
percentage ofgross impaired assets	27.2	24.9	28.4
Provision for impairment expressed as a percentage of
gross loans and advances are as follows:
Collective provision	0.19	0.19	0.22
Specific provision	0.08	0.08	0.10
Total provision	0.27	0.27	0.32
ERCL coverage	0.21	0.23	0.25
Total provision and ERCL coverage	0.48	0.50	0.57

ERCL coverage was 48 basis points of gross loans and advances.

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APS 330 for the quarter ended 31 March 2017

SUNCORP BANK

Gross non-performing loans coverage by portfolio

Mar-17						Total
						provision
	Past due	Impaired	Specific	Collective	ERCL (pre-tax	and ERCL
	loans	assets	provision	provision	equivalent)	coverage
	$M	$M	$M	$M	$M	%
Retail lending	341	30	8	40	48	26%
Agribusiness lending	11	88	15	34	19	69%
Commercial/SME lending	23	51	23	28	47	132%
Total	375	169	46	102	114	48%

Dec-16						Total
						provision
	Past due	Impaired	Specific	Collective	ERCL (pre-tax	and ERCL
	loans	assets	provision	provision	equivalent)	coverage
	$M	$M	$M	$M	$M	%
Retail lending	302	30	7	40	51	30%
Agribusiness lending	9	96	16	36	22	70%
Commercial/SME lending	27	59	23	26	48	113%
Total	338	185	46	102	121	51%

Mar-16						Total
						provision
	Past due	Impaired	Specific	Collective	ERCL (pre-tax	and ERCL
	loans	assets	provision	provision	equivalent)	coverage
	$M	$M	$M	$M	$M	%
Retail lending	365	23	9	40	65	29.4
Agribusiness lending	22	123	25	39	20	57.9
Commercial/SME lending	29	44	20	34	46	137.0
Total	416	190	54	113	131	49.2

Retail lending past due loans grew by $39 million (12.9%) to $341 million over the quarter, predominantly in Queensland, which accounts for 50% of the Bank’s portfolio, and Western Australia, with increases of $24.9 million (19%) and $11.6 million (23%) respectively. Hardship relief cases accounted for $28 million, or approximately 72% of the total increase in past due loans.

The Bank continues to conduct regular reviews of all non-performing loans, assessed against recent, relevant and objective data, to identify any material deterioration driving the requirement for impairment or a specific provision.

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SUNCORP BANK

APS 330 for the quarter ended 31 March 2017

Appendix 1 – APS 330 tables

• Table 1: Capital Disclosure Template – not applicable

• Table 2: Main Features of Capital Instruments

• Table 3: Capital Adequacy

• Table 4: Credit Risk

• Table 5: Securitisation Exposures

Table 2: Main Features of Capital Instruments

Attachment B of APS 330 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 http://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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SUNCORP BANK

Table 3: Capital Adequacy

Table 3: Capital Adequacy
	CARRYING VALUE		AVG RISK WEIGHT	RISK- WEIGHTED ASSETS
	Mar-17	Dec-16	Mar-17	Mar-17	Dec-16
	$M	$M	%	$M	$M
On-balance sheet credit risk-weighted assets
Cash items	421	424	1	5	-
Claims on Australian and foreign governments	2,850	2,951	-	-	-
Claims on central banks, international banking agencies,
regional development banks, ADIs and overseas banks	1,699	2,671	22	367	593
Claims on securitisation exposures	1,153	1,094	20	231	219
Claims secured against eligible residential mortgages	41,619	42,541	37	15,552	15,942
Past due claims	503	480	90	451	452
Other retail assets	357	380	80	285	308
Corporate	8,604	8,620	100	8,593	8,610
Other assets and claims	274	337	100	274	335
Total banking assets	57,480	59,498	45	25,758	26,459
	NOTIONAL AMOUNT	CREDIT EQUIVALENT	AVG RISK WEIGHT	RISK- WEIGHTED ASSETS
	Mar-17	Mar-17	Mar-17	Mar-17	Dec-16
	$M	$M	%	$M	$M
Off-balance sheet positions
Guarantees entered into in the normal course of business	260	257	67	172	169
Commitments to provide loans and advances	8,420	2,208	60	1,328	1,344
Foreign exchange contracts	5,369	126	43	54	60
Interest rate contracts	51,085	93	33	31	27
Securitisation exposures	3,196	98	65	64	39
CVA capital charge	-	-	-	108	88
Total off-balance sheetpositions	68,330	2,782	63	1,757	1,727
Market risk capital charge				122	98
Operational risk capital charge				3,391	3,391
Total off-balance sheet positions				1,757	1,727
Total on-balance sheet credit risk-weighted assets				25,758	26,459
Total assessed risk				31,028	31,675
Risk-weighted capital ratios				%	%
Common Equity Tier 1				9.19	9.15
Tier 1				10.64	10.57
Tier 2				2.91	2.86
Total risk-weighted capital ratio				13.55	13.43

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SUNCORP BANK

APS 330 for the quarter ended 31 March 2017

TABLE 4: Credit Risk

Table 4A: Credit risk by gross credit exposure – outstanding as at 31 March 2017

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 - - - 3,824 271 - Construction & development - - - 529 176 - Financial services 550 - 1,089 103 249 219 Hospitality - - - 951 68 - Manufacturing - - - 264 19 - Professional services - - - 264 15 - Property investment - - - 1,907 130 - Real estate - Mortgage - - - 41,152 1,374 - Personal - - - 263 5 - Government/public authorities - 1,518 2,373 - - - Other commercial & industrial - - - 1,992 158 -	4,095 80 6 4,009 12 705 3 1 701 1 2,210 - - 2,210 - 1,019 32 - 987 15 283 - - 283 - 279 6 1 272 4 2,037 6 2 2,029 3 42,526 30 321 42,175 5 268 2 6 260 2 3,891 - - 3,891 - 2,150 10 24 2,116 4
Total gross credit risk 550 1,518 3,462 51,249 2,465 219 Securitisation exposures(1) - - 1,153 3,103 30 68	59,463 169 361 58,933 46 4,354 - 14 4,340 -
Total including Securitisation exposures 550 1,518 4,615 54,352 2,495 287 Impairment provision TOTAL	63,817 169 375 63,273 46
	(148) (46) (22) (80) 63,669 123 353 63,193

(1) The securitisation exposures of $3,103 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 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 Construction & development Financial services Hospitality Manufacturing Professional services Property investment Real estate - Mortgage Personal Government/public authorities Other commercial & industrial	- - - 3,933 222 - - - - 521 126 - 473 70 1,985 92 240 251 - - - 903 51 - - - - 250 19 - - - - 239 10 - - - - 2,043 97 - - - - 42,069 1,784 - - - - 272 5 - - 1,527 2,225 1 - - - - - 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 Securitisation Exposures(1)	473 1,597 4,210 52,187 2,716 251 - - 1,094 2,008 20 38	61,434 185 325 60,924 46 3,160 - 13 3,147 -
Total including Securitisation Exposures Impairment provision TOTAL	473 1,597 5,304 54,195 2,736 289	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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APS 330 for the quarter ended 31 March 2017

TABLE 4: Credit Risk (continued)

Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 January to 31 March 2017

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 - - - 3,879 247 - Construction & development - - - 525 151 - Financial services 512 35 1,537 98 245 235 Hospitality - - - 927 60 - Manufacturing - - - 257 19 - Professional services - - - 252 13 - Property investment - - - 1,975 114 - Real estate - Mortgage - - - 41,611 1,579 - Personal - - - 268 5 - Government/public authorities - 1,523 2,299 1 - - Other commercial & industrial - - - 1,928 160 -	4,126 676 2,662 987 276 265 2,089 43,190 273 3,823 2,088
Total gross credit risk 512 1,558 3,836 51,721 2,593 235 Securitisation exposures(1) - - 1,124 2,556 25 53	60,455 3,758
Total including Securitisation exposures 512 1,558 4,960 54,277 2,618 288 Impairment provision TOTAL	64,213
	(148)
	64,065

(1) The securitisation exposures of $2,556 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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APS 330 for the quarter ended 31 March 2017

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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	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	- - - 3,953 208 -	4,161
	- - - 530 138 -	668
	526 95 2,072 94 236 248	3,271
	- - - 909 46 -	955
	- - - 254 18 -	272
	- - - 243 10 -	253
	- - - 2,028 89 -	2,117
	- - - 41,923 1,575 -	43,498
	- - - 280 6 -	286
	- 1,527 2,239 1 - -	3,767
	- - - 1,845 158 -	2,003
Total gross credit risk Securitisation Exposures(1)	526 1,622 4,311 52,060 2,484 248	61,251
	- - 1,003 2,082 21 23	3,129
Total including Securitisation Exposures Impairment provision TOTAL	526 1,622 5,314 54,142 2,505 271	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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SUNCORP BANK

APS 330 for the quarter ended 31 March 2017

TABLE 4: Credit Risk (continued)

Table 4B: Credit risk by portfolio – 31 March 2017

				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)	46,880	46,948	30	335	5	2
Other retail	268	273	2	6	2	3
Financial services	2,210	2,662	-	-	-	-
Government and public authorities	3,891	3,823	-	-	-	-
Corporate and other claims	10,568	10,507	137	34	39	1
Total	63,817	64,213	169	375	46	6

(1) $4,354 million, $3,758 million and $14 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 – 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 4C: General reserves for credit losses

	Mar-17	Dec-16
	$M	$M
Collective provision for impairment	102	102
Ineligible collectiveprovisions on Past Due not Impaired	(22)	(22)
Eligible collective provisions	80	80
Equityreserve for credit losses	80	85
General reserve for credit losses	160	165

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APS 330 for the quarter ended 31 March 2017

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
	Mar-17	Dec-16	Mar-17	Dec-16
	$M $M $M $M
Residential mortgages	1,250 - - -
Total exposures securitised during theperiod	1,250 - - -

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

	Mar-17	Dec-16
Exposure type	$M	$M
Debt securities	1,153	1,094
Total on-balance sheet securitisation exposures	1,153	1,094

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

	Mar-17	Dec-16
Exposure type	$M	$M
Liquidity facilities	30	20
Derivative exposures	68	38
Total off-balance sheet securitisation exposures	98	58

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APS 330 for the quarter ended 31 March 2017

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Appendix 3 – Definitions

ADI	Authorised Deposit-taking Institution
APRA	Australian Prudential Regulatory Authority
Capital adequacy ratio	Capital base divided by total assessed risk, as defined by APRA
Common Equity Tier 1	Common Equity Tier 1 Capital (CET1) comprises accounting equity
	plus adjustments for intangible assets and regulatory reserves
Common Equity Tier 1 ratio	Common Equity Tier 1 divided by total assessed risk
Credit Value Adjustment	A capital charge that covers the risk of mark-to-market losses on the
(CVA)	counterparty credit risk
Equity reserve for credit	The equity reserve for credit losses represents the difference between
losses	the collective provision for impairment and the estimate of credit
	losses across the credit cycle based on guidance provided by APRA
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
Net Stable Funding Ratio	NSFR is a measure announced as part of the Basel III liquidity
(NSFR)	reforms that will apply from January 2018. The ratio establishes a
	minimum acceptable amount of stable funding (the portion of those
	types and amounts of equity and liability financing expected to be
	reliable sources of funds over a one-year time horizon under
	conditions of extended stress) based on the liquidity characteristics of
	an ADI’s assets and activities over a one-year horizon.
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

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