AI assistant
SUNCORP GROUP LIMITED — Interim / Quarterly Report 2018
Aug 8, 2018
65879_rns_2018-08-08_158f30ce-5d1a-4c70-9d5f-9fe4d4b4113b.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
SUNCORP GROUP LIMITED SUNCORP BANK APS 330
FOR THE QUARTER ENDED 30 JUNE 2018
RELEASE DATE: 9 AUGUST 2018
==> picture [185 x 54] intentionally omitted <==
Suncorp Group Limited
ABN 66 145 290 124
SUNCORP
APS 330
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 30 June 2018 (unless otherwise stated) and should be read in conjunction with other information concerning Suncorp Group filed with the Australian Securities Exchange ( ASX ).
DISCLAIMER
This report contains general information which is current as at 9 August 2018. 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 consider 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
Investor Relations
Level 28, 266 George Street Kelly Hibbins Andrew Dempster Brisbane Queensland 4000 EGM Investor Relations EM Investor Relations Telephone: (07) 3362 1222 Telephone: (02) 8121 9208 Telephone: (02) 8121 9206 suncorpgroup.com.au [email protected] [email protected]
PAGE 2
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE OF CONTENTS
BASIS OF PREPARATION ..................................................................................................................................... 2 Regulatory Capital Reconciliation ............................................................................................................................ 4 Table 1: Capital Disclosure Template ...................................................................................................................... 6 Table 2: Main features of capital instruments ........................................................................................................... 9 Table 3: Capital adequacy ..................................................................................................................................... 10 Table 4: Credit risk ................................................................................................................................................ 11 Table 5: Securitisation exposures .......................................................................................................................... 17 Table 18: Remuneration Disclosures ..................................................................................................................... 18 Table 20: Liquidity Coverage Ratio Disclosure ....................................................................................................... 19 Appendix - Definitions ........................................................................................................................................... 21
PAGE 3
AS AT 30 JUNE 2018
SUNCORP
APS 330
REGULATORY CAPITAL RECONCILIATION
The following table discloses the consolidated balance sheet of SML and its subsidiaries ( Suncorp Bank ), as published in its audited financial statements, and the balance sheet under the Level 2 regulatory scope of consolidation pursuant to APS 111 Capital Adequacy: Measurement of Capital.
Each component of capital reported below in Table 1: Common Disclosures – Composition of Capital can be reconciled to the balance sheets below using the reference letters included in both tables.
| Per table 1 Capital Disclosure Statutory Jun-18 $M Adjustments Jun-18 $M Regulatory Jun-18 $M |
|
|---|---|
| Assets Cash and cash equivalents Receivables due from other banks Trading securities Derivatives Investment securities Investment in regulatory non-consolidated subsidiaries Loans and advances of which: eligible collective provision component of GRCL in tier 2 capital of which: loan and lease origination fees and commissions paid to mortgage originators and brokers in CET1 regulatory adjustments of which: costs associated with debt raisings in CET1 regulatory adjustments Due from related parties Deferred tax assets |
506 (3) 503 474 - 474 1,639 - 1,639 224 - 224 4,058 - 4,058 (i) - 1 1 58,598 (4,728) 53,870 (o) - - 70 (f) - - 219 (g) - - 11 362 - 362 45 - 45 |
| of which: arising from temporary differences included in CET1 regulatory adjustments |
(e) - - 37 |
| Goodwill Otherassets |
(d) 21 - 21 178 (24) 154 |
| Total assets | 66,105 (4,754) 61,351 |
| Liabilities Payables due to other banks 148 - 148 Deposits and short-term borrowings 46,043 14 46,057 Derivatives 158 - 158 Payables and other liabilities 423 (10) 413 Due to related parties 20 - 20 Due to regulatory non-consolidated subsidiaries - 77 77 Securitisation liabilities 4,848 (4,818) 30 of which: securitisation start-up costs in CET1 regulatory adjustments (h) - - 8 Debt issues 9,854 - 9,854 Subordinated notes 742 - 742 of which: directly issued qualifying tier 2 instruments (k) - - 670 of which: directly issued instruments subject to phase out from tier 2 (l) - - 72 |
|
| Total liabilities 62,236 (4,737) 57,499 |
|
| Net assets 3,869 (17) 3,852 |
|
| Equity Share capital (a) 2,648 - 2,648 Capital notes (j) 550 - 550 Reserves (298) - (298) of which: equity component of GRCL in tier 2 capital (m) - - 88 of which: AFS reserve (c) - - 6 of which: cash flow hedge reserve (n) - - (20) Retained profits 969 (17) 952 of which: included in CET1 (b) - - 580 |
|
| Total equity attributable to owners of the Company 3,869 (17) 3,852 |
PAGE 4
AS AT 30 JUNE 2018
SUNCORP
APS 330
REGULATORY CAPITAL RECONCILIATION (CONTINUED)
The Level 2 group for regulatory capital purposes consists of the parent entity, SML, and its eligible subsidiaries.
The following legal entities are included in the accounting scope of consolidation but are excluded from the regulatory scope of consolidation:
| regulatory scope of consolidation: | ||
|---|---|---|
| Total | Total | |
| assets | liabilities | |
| Jun-18 | Jun-18 | |
| $ | $ | |
| SPDEF #2 Pty Ltd | 1 | - |
| Principal activity: | ||
| The company acts as trustee for Suncorp Property Development Equity Fund #2 Unit Trust. | ||
| Total | Total | |
| assets | liabilities | |
| Jun-18 | Jun-18 | |
| $M | $M | |
| Suncorp Property Development Equity Fund #2 Unit Trust | 18 | 1 |
| Principal activity: | ||
| The Trust was established by the directors of SPDEF #2 Pty Ltd (the trustee) for the purpose of forming an unincorporated | ||
| joint venture to develop land for the purpose of reselling as residential housing lots. |
| joint venture to develop land for the purpose of reselling as residential housing lots. | ||
|---|---|---|
| Total | Total | |
| assets | liabilities | |
| Jun-18 | Jun-18 | |
| $M | $M | |
| Securitisation special purpose vehicles(1) | ||
| Apollo Series 2010-1 Trust | 136 | 136 |
| Apollo Series 2011-1 Trust | 228 | 228 |
| Apollo Series 2012-1 Trust | 233 | 233 |
| Apollo Series 2013-1 Trust | 310 | 310 |
| Apollo Series 2015-1 Trust | 553 | 553 |
| Apollo Series 2017-1 Trust | 891 | 891 |
| Apollo Series 2017-2 Trust | 1,253 | 1,253 |
| Apollo Series 2018-1 Trust | 1,219 | 1,219 |
| Principal activity: | ||
| The Trusts were established for the purpose of raising funds, via the issue of mortgage backed securities, to fund the | ||
| purchase of mortgage loans by equitable assignment. |
- (1) The Trusts qualify for regulatory capital relief under APS 120 and are therefore deconsolidated from the Level 2 regulatory group. The assets of the Trusts include the secured loans from SML, representing the outstanding balance of securitised mortgages and accrued interest, as well as cash and other receivables.
Any transfer of funds or regulatory capital within the Level 2 group can occur only after the relevant approvals from management and the Board of each affected entity, in line with the Suncorp Group’s capital management policies. Any such transactions must be consistent with the Suncorp Group’s capital management strategy objectives to ensure each entity in the Level 2 group has sufficient capital resources to maintain the business and operational requirements, retain sufficient capital to exceed externally imposed capital requirements, and ensure Suncorp Bank’s ability to continue as a going concern.
PAGE 5
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 1: CAPITAL DISCLOSURE TEMPLATE
The disclosures below are presented using the post 1 January 2018 common disclosure template as, pursuant to APRA guidelines, SML and its eligible subsidiaries are applying, in full, the Basel III regulatory adjustments from 1 January 2013.
| Capital Jun-18 Reconciliation $M Per Regulatory |
|
|---|---|
| 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 |
Common Equity Tier 1 capital: instruments and reserves (a) 2,648 Retained earnings (b) 580 (c)+(n) (14) Directly issued qualifying ordinary shares (and equivalent for mutually-owned entities) Accumulated other comprehensive income (and other reserves) Directly issued capital subject to phase out from CET1 (only applicable to mutually-owned companies) Ordinary share capital issued by subsidiaries and held by third parties (amount allowed in groupCET1) |
| Common Equity Tier 1 capital before regulatory adjustments 3,214 |
|
| Common Equity Tier 1 capital: regulatory adjustments (d) 21 (n) (20) of which: significant investments in the ordinary shares of financial entities of which: mortgage servicing rights of which: deferred tax assets arising from temporary differences 278 Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability) Amount exceeding the 15% threshold National specific regulatory adjustments (sum of rows 26a, 26b, 26c, 26d, 26e, 26f, 26g, 26h, 26i and 26j) Investments in own shares (if not already netted off paid-in capital on reported balance Reciprocal cross-holdings in common equity Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold) Significant investments in the ordinary shares of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold) Mortgage service rights (amount above 10% threshold) Prudential valuation adjustments Goodwill (net of related tax liability) Other intangibles other than mortgage servicing rights (net of related tax liability) Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) Cash-flow hedge reserve Shortfall of provisions to expected losses Securitisation gain on sale (as set out in paragraph 562 of Basel II framework) Gains and losses due to changes in own credit risk on fair valued liabilities Defined benefit superannuation fund net assets |
|
| 26a | of which: treasury shares |
| 26b 26c 26d 26e 26f |
of which: offset to dividends declared under a dividend reinvestment plan (DRP), to the extent that the dividends are used to purchase new ordinary shares issued by the ADI of which: deferred fee income of which: equity investments in financial institutions not reported in rows 18, 19 and 23 of which: deferred tax assets not reported in rows 10, 21 and 25 (e) 37 of which: capitalised expenses (f)+(g)+(h) 238 |
| 26g | of which: investments in commercial (non-financial) entities that are deducted under APRA requirements (i) 1 |
| 26h | of which: covered bonds in excess of asset cover in pools |
| 26i | of which: undercapitalisation of a non-consolidated subsidiary |
| 26j | of which: other national specific regulatory adjustments not reported in rows 26a to 26i 3 |
| 27 28 29 |
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover deductions |
| Total regulatory adjustments to Common Equity Tier 1 279 |
|
| Common Equity Tier 1 Capital(CET1) 2,935 |
PAGE 6
AS AT 30 JUNE 2018
SUNCORP
APS 330
| Capital Jun-18 Reconciliation $M Per Regulatory |
|
|---|---|
| 30 31 32 33 34 35 36 37 38 39 40 41 |
Additional Tier 1 Capital: instruments Directly issued qualifying Additional Tier 1 instruments 550 of which: classified as equity under applicable accounting standards (j) 550 of which: classified as liabilities under applicable accounting standards Directly issued capital instruments subject to phase out from Additional Tier 1 of which: instruments issued by subsidiaries subject tophase out Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties (amount allowed in group AT1) |
| Additional Tier 1 Capital before regulatory adjustments 550 |
|
| Additional Tier 1 Capital: regulatory adjustments Investments in own Additional Tier 1 instruments Reciprocal cross-holdings in Additional Tier 1 instruments National specific regulatory adjustments (sum of rows 41a, 41b and 41c) Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold) Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) |
|
| 41a 41b 41c |
of which: holdings of capital instruments in group members by other group members of which: investments in the capital of financial institutions that are outside the scope of which: other national specific regulatory adjustments not reported in rows 41a & |
| 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 |
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions |
| Total regulatory adjustments to Additional Tier 1 capital - |
|
| Additional Tier 1 capital(AT1) 550 |
|
| Tier 1 Capital(T1=CET1+AT1) 3,485 |
|
| Tier 2 Capital: instruments and provisions Directly issued qualifying Tier 2 instruments (k) 670 Directly issued capital instruments subject to phase out from Tier 2 (l) 72 of which: instruments issued by subsidiaries subject to phase out Provisions (m)+(o) 158 Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties (amount allowed in group T2) |
|
| Tier 2 Capital before regulatory adjustments 900 |
|
| Tier 2 Capital: regulatory adjustments Investments in own Tier 2 instruments Reciprocal cross-holdings in Tier 2 instruments National specific regulatory adjustments (sum of rows 56a, 56b and 56c) Investments in the Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold) Significant investments in the Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions |
|
| 56a 56b 56c |
of which: holdings of capital instruments in group members by other group members on behalf of third parties of which: investments in the capital of financial institutions that are outside the scope of regulatory consolidation not reported in rows 54 and 55 of which: other national specific regulatory adjustments not reported in rows 56a & 56b |
| 57 58 59 60 |
Total regulatory adjustments to Tier 2 capital - |
| Tier 2 capital(T2) 900 |
|
| Total capital(TC=T1+T2) 4,384 |
|
| Total risk-weighted assets based on APRA standards 32,563 |
PAGE 7
AS AT 30 JUNE 2018
SUNCORP
APS 330
| Capital Jun-18 Reconciliation $M Per Regulatory |
|
|---|---|
| 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 |
Capital ratios and buffers Common Equity Tier 1 (as a percentage of risk-weighted assets) 9.01% Tier 1 (as a percentage of risk-weighted assets) 10.70% Total capital (as a percentage of risk-weighted assets) 13.46% 7.00% of which: capital conservation buffer requirement 2.50% of which: ADI-specific countercyclical buffer requirements of which: G-SIB buffer requirement (not applicable) 9.01% Common EquityTier 1 available to meet buffers(as apercentage of risk-weighted assets) Buffer requirement (minimum CET1 requirement of 4.5% plus capital conservation buffer of 2.5% plus any countercyclical buffer requirements expressed as a percentage of risk- weighted assets) |
| National minima (if different from Basel III) National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) National Tier 1 minimum ratio (if different from Basel III minimum) National total capital minimum ratio(if different from Basel III minimum) |
|
| Amount below thresholds for deductions (not risk-weighted) Non-significant investments in the capital of other financial entities Significant investments in the ordinary shares of financial entities Mortgage servicing rights (net of related tax liability) Deferred tax assets arisingfrom temporarydifferences(net of related tax liability) (e) 37 |
|
| Applicable caps on the inclusion of provisions in Tier 2 (m)+(o) 158 363 Capfor inclusion ofprovisions in Tier 2 under internal ratings-based approach Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardised approach (prior to application of cap) Cap on inclusion of provisions in Tier 2 under standardised approach Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings- based approach (prior to application of cap) |
|
| Capital instruments subject to phase-out arrangements (only applicable between 1 Jan 2018 and 1 Jan 2022) 76 Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities) Current cap on AT1 instruments subject to phase out arrangements Amount excluded from AT1 instruments due to cap (excess over cap after redemptions and maturities) Current cap on T2 instruments subject to phase out arrangements Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) Current cap on CET1 instruments subject to phase out arrangements |
PAGE 8
AS AT 30 JUNE 2018
SUNCORP
APS 330
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 http://www.suncorpgroup.com.au/investors/reports.
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] .
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.
PAGE 9
SUNCORP
APS 330
TABLE 3: CAPITAL ADEQUACY
| Avg risk | Risk Weighted |
||||
|---|---|---|---|---|---|
| Carrying value | w eight | Assets | |||
| Jun-18 | Mar-18 | Jun-18 | Jun-18 | Mar-18 | |
| $M | $M | % | $M | $M | |
| On-balance sheet credit risk-weighted assets | |||||
| Cash items | 479 | 463 | 2 | 8 |
6 |
| Claims on Australian and foreign governments | 2,365 | 2,286 | - | - | - |
| Claims on central banks, international banking | 933 | 1,094 | 25 | 233 |
226 |
| agencies, regional development banks, ADIs and | |||||
| overseas banks | |||||
| Claims on securitisation exposures | 1,242 | 1,292 | 20 | 246 |
259 |
| Claims secured against eligible residential | 43,343 | 44,077 | 37 | 16,039 |
16,315 |
| mortgages | |||||
| Past due claims | 623 | 544 | 82 | 511 |
459 |
| Other retail assets | 268 | 348 | 97 | 259 |
285 |
| Corporate | 9,571 | 9,429 | 100 | 9,559 |
9,420 |
| Other assets and claims | 379 | 290 | 100 | 379 |
290 |
| Total banking assets | 59,203 | 59,823 | 27,234 | 27,260 | |
| Notional | Credit |
Avg risk |
Risk Weighted |
||
| amount | equivalent | w eight | Assets | ||
| Jun-18 | Jun-18 | Jun-18 | Jun-18 | Mar-18 | |
| $M | $M | % | $M | $M | |
| Off-balance sheet positions | |||||
| Guarantees entered into in the normal course of | |||||
| business | 271 | 270 | 68 | 184 | 177 |
| Commitments to provide loans and advances | 8,619 | 2,305 | 59 | 1,363 | 1,311 |
| Foreign exchange contracts | 5,386 | 113 | 27 | 31 | 32 |
| Interest rate contracts | 49,132 | 89 | 29 | 26 | 26 |
| Securitisation exposures | 4,660 | 181 | 20 | 36 | 41 |
| CVAcapitalcharge | - | - | - | 128 | 152 |
| Total off-balance sheet positions | 68,068 | 2,958 | 1,768 | 1,739 | |
| Market risk capital charge | 88 | 130 | |||
| Operational risk capital charge | 3,473 | 3,441 | |||
| Total off-balance sheet positions | 1,768 | 1,739 | |||
| Total on-balance sheet credit risk-w eighted | 27,234 | 27,260 | |||
| assets | |||||
| Total assessed risk | 32,563 | 32,570 | |||
| Risk-weighted capital ratios | % | % | |||
| Common Equity Tier 1 | 9.01 | 8.80 | |||
| Tier 1 | 10.70 | 10.49 | |||
| Tier 2 | 2.76 | 2.76 | |||
| Total risk-weighted capital ratio | 13.46 | 13.25 |
PAGE 10
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK
Table 4A: Credit risk by gross credit exposure – outstanding as at 30 June 2018
| TABLE 4: CREDIT RISK Table 4A: Credit risk by gross credit exposure – outstanding as at 30 June 2018 |
TABLE 4: CREDIT RISK Table 4A: Credit risk by gross credit exposure – outstanding as at 30 June 2018 |
|---|---|
| Receivables due from other Banks(2) Trading Securities Derivatives (3) Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions (5) $M $M $M $M $M $M $M $M $M $M $M |
|
| Agribusiness - - - 4,014 197 Construction & development - - - 732 251 Financial services 474 - 202 691 92 172 Hospitality - - - 986 96 Manufacturing - - - 234 24 Professional services - - - 278 17 Property investment - - - 2,448 121 Real estate - Mortgage - - - 42,883 1,484 Personal - - - 182 5 Government/public authorities - 1,639 2,125 - - Other commercial & industrial(6) - - - 2,151 208 |
4,211 48 25 4,138 17 983 1 1 981 1 1,631 - - 1,631 - 1,082 26 1 1,055 6 258 2 2 254 - 295 1 2 292 1 2,569 8 3 2,558 3 44,367 38 450 43,879 5 187 - 5 182 - 3,764 - - 3,764 - 2,359 20 22 2,317 6 |
| Total gross credit risk 474 1,639 202 2,816 54,000 2,575 Securitisation exposures(1) - - 99 1,242 4,728 82 |
61,706 144 511 61,051 39 6,151 30 6,121 |
| Total including securitisation exposures 474 1,639 301 4,058 58,728 2,657 Impairment provision Total |
67,857 144 541 67,172 39 (130) (39) (21) (70) 67,727 105 520 67,102 |
(1) The securitisation exposures of $4,728 million included under Loans and advances qualify for regulatory capital relief under APS 120 Securitisation 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 Securitisation .
(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.
(3) Represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112 Capital Adequacy .
(4) Total credit risk excludes cash and cash equivalents, including any reverse repurchase agreements held by the ADI.
(5) In accordance with APS 220 Credit Quality , regulatory specific provisions represent $39 million specific provisions for accounting purposes plus $21 million ineligible collective provision.
(6) Includes a portion of small business loans, with limits below $1 million, that are not classified.
PAGE 11
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK (CONTINUED)
Table 4A: Credit risk by gross credit exposure – outstanding as at 31 March 2018
| Receivables due from other Banks(2) Trading Securities Derivatives Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions (5) $M $M $M $M $M $M $M $M $M $M $M |
Receivables due from other Banks(2) Trading Securities Derivatives Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) Gross Impaired Assets Past due not impaired > 90 days Total not past due or impaired Specific Provisions (5) $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(6) |
- - - - 3,933 231 - - - - 730 203 542 - 138 704 95 379 - - - - 972 68 - - - - 253 21 - - - - 273 19 - - - - 2,365 182 - - - - 43,559 1,400 - - - - 258 5 - 1,607 - 2,051 - - - - - - 2,142 182 |
4,164 45 17 4,102 15 933 - 1 932 - 1,858 - 1 1,857 - 1,040 25 1 1,014 5 274 2 3 269 - 292 4 3 285 3 2,547 5 4 2,538 3 44,959 41 364 44,554 6 263 - 8 255 - 3,658 - - 3,658 - 2,324 18 30 2,276 6 |
| Total gross credit risk Securitisation Exposures(1) |
542 1,607 138 2,755 54,580 2,690 - - - 1,292 3,739 207 |
62,312 140 432 61,740 38 5,238 - 21 5,217 - |
| Total including securitisation exposures Impairment provision Total |
542 1,607 138 4,047 58,319 2,897 |
67,550 140 453 66,957 38 (131) (38) (20) (73) |
| 67,419 102 433 66,884 |
(1) The securitisation exposures of $3,739 million included under Loans and advances qualify for regulatory capital relief under APS 120 Securitisation 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 Securitisation .
(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.
(3) Represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112 Capital Adequacy .
(4) Total credit risk excludes cash and cash equivalents, including any reverse repurchase agreements held by the ADI.
(5) In accordance with APS 220 Credit Quality , regulatory specific provisions represent $38 million specific provisions for accounting purposes plus $20 million ineligible collective provision.
(6) Includes a portion of small business loans, with limits below $1 million, that are not classified.
PAGE 12
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK (CONTINUED)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 April to 30 June 2018
| Receivables due from other Banks (2) Trading Securities Derivatives (3) Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) $M $M $M $M $M $M $M |
Receivables due from other Banks (2) Trading Securities Derivatives (3) Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) $M $M $M $M $M $M $M |
|---|---|
| $M | |
| Agribusiness - - - - 3,974 214 Construction & development - - - - 731 227 Financial services 508 - 170 698 94 275 Hospitality - - - - 979 82 Manufacturing - - - - 244 23 Professional services - - - - 276 18 Property investment - - - - 2,407 151 Real estate - Mortgage - - - - 43,221 1,442 Personal - - - - 220 5 Government/public authorities - 1,623 - 2,088 - - Othercommercial&industrial - - - - 2,147 195 |
4,188 958 1,745 1,061 267 294 2,558 44,663 225 3,711 2,342 |
| Total gross credit risk 508 1,623 170 2,786 54,293 2,632 Securitisationexposures (1) - - 50 1,267 4,234 144 |
62,012 5,695 |
| Total including securitisation exposures 508 1,623 220 4,053 58,527 2,776 Impairment provision Total |
67,707 |
| (131) | |
| 67,576 |
(1) The securitisation exposures of $4,234 million included under Loans and advances qualify for regulatory capital relief under APS 120 Securitisation 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 Securitisation .
(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.
(3) Represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112 Capital Adequacy .
(4) Total credit risk excludes cash and cash equivalents, including any reverse repurchase agreements held by the ADI.
PAGE 13
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK (CONTINUED)
Table 4A: Credit risk by gross credit exposure – average gross exposure over period 1 January to 31 March 2018
| Receivables due from other Banks (2) Trading Securities Derivatives Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) |
Receivables due from other Banks (2) Trading Securities Derivatives Investment Securities Loans and Advances Off-balance sheet exposures (credit equivalent amount)(3) Total Credit Risk (4) |
|
|---|---|---|
$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 Othercommercial&industrial |
- - - - 3,905 241 |
4,146 |
| - - - - 725 223 |
948 | |
| 506 - 128 805 97 378 |
1,914 | |
| - - - - 973 60 |
1,033 | |
| - - - - 256 22 |
278 | |
| - - - - 277 20 |
297 | |
| - - - - 2,320 170 |
2,490 | |
| - - - - 43,258 1,633 |
44,891 | |
| - - - - 259 5 |
264 | |
| - 1,560 - 2,189 - - |
3,749 | |
| - - - - 2,118 241 |
2,359 | |
| Total gross credit risk Securitisation Exposures(1) |
506 1,560 128 2,994 54,188 2,993 - - - 1,319 3,858 138 |
62,369 5,315 |
| Total including securitisation exposures Impairment provision Total |
506 1,560 128 4,313 58,046 3,131 |
67,684 |
| (131) | ||
| 67,553 |
(1) The securitisation exposures of $3,858 million included under Loans and advances qualify for regulatory capital relief under APS 120 Securitisation 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 Securitisation .
(2) Receivables due from other banks include collateral deposits provided to derivative counterparties.
(3) Represent the credit equivalent amount of the Bank’s off-balance sheet exposures calculated in accordance with APS 112 Capital Adequacy .
(4) Total credit risk excludes cash and cash equivalents, including any reverse repurchase agreements held by the ADI.
PAGE 14
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK (CONTINUED)
Table 4B: Credit risk by portfolio as at 30 June 2018
| Charges for | ||||||
|---|---|---|---|---|---|---|
| Average | Past due Not | Specific |
Specific |
|||
| Gross Credit | Gross | Impaired | Impaired > 90 | Provisions |
Provisions & |
|
| Risk Exposure | Exposure | Assets | days | (2) |
Write Offs | |
| $M | $M | $M | $M | $M |
$M |
|
| Claims secured against eligible residential mortgages(1) |
50,518 | 50,358 | 38 | 480 | 5 | 2 |
| Other retail | 187 | 225 |
- | 5 | - |
6 |
| Financial services | 1,631 | 1,745 |
- | - | - | - |
| Government and public authorities | 3,764 | 3,711 |
- | - | - | - |
| Corporate and otherclaims | 11,757 | 11,668 | 106 | 56 | 34 | 6 |
| Total | 67,857 | 67,707 | 144 | 541 | 39 | 14 |
(1) $6,151 million, $5,695 million and $30 million has been included in gross credit risk exposure, average gross exposure and past due not impaired greater than 90 days respectively to include securitisation exposures.
(2) The specific provisions of $39 million represents the specific provisions for accounting purposes. It excludes the ineligible collective provisions of $21 million which in accordance with APS220 are regulatory specific provisions. The regulatory specific provisions under APS220 are $60 million.
Table 4B: Credit risk by portfolio as at 31 March 2018
| Charges for | ||||||
|---|---|---|---|---|---|---|
| Gross Credit | Average |
Past due Not | Specific | Specific | ||
| Risk Exposure | Gross | Impaired | Impaired > 90 | Provisions | Provisions & | |
| (3) | Exposure | Assets | days | (2) | Write Offs | |
| $M | $M |
$M | $M | $M | $M | |
| Claims secured against eligible | ||||||
| residential mortgages(1) | 50,197 | 50,206 | 41 | 385 | 6 | 3 |
| Other retail | 263 | 264 | - | 8 | - | - |
| Financial services | 1,858 | 1,914 | - | 1 | - | - |
| Government and public authorities | 3,658 | 3,749 | - | - | - | - |
| Corporate and otherclaims | 11,574 | 11,551 | 99 | 59 | 32 | - |
| Total | 67,550 | 67,684 | 140 | 453 | 38 | 3 |
(1) $5,238 million, $5,315 million and $21 million has been included in gross credit risk exposure, average gross exposure and past due not impaired greater than 90 days respectively to include securitisation exposures.
(2) The specific provisions of $38 million represents the specific provisions for accounting purposes. It excludes the ineligible collective provisions of $20 million which in accordance with APS220 are regulatory specific provisions. The regulatory specific provisions under APS220 are $58 million.
(3) Total “Gross Credit Risk Exposure” originally reported as $67,483 million in the March 2018 APS 330. This number has been updated to reflect the correct gross credit risk exposure.
PAGE 15
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 4: CREDIT RISK (CONTINUED)
Table 4C: General reserves for credit losses
| TABLE 4: CREDIT RISK (CONTINUED) Table 4C: General reserves for credit losses |
|
|---|---|
| Jun-18 Mar-18 $M $M |
|
| Collective provision for impairment | 91 93 |
| Ineligible collective provisions onpast duenotimpaired | (21) (20) |
| Eligible collective provisions Equityreserve for credit losses |
70 73 88 83 |
| General reserve for credit losses | 158 156 |
PAGE 16
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 5: SECURITISATION EXPOSURES
Table 5A: Summary of securitisation activity for the period
Securitisation activity during the quarter ending 30 June 2018 (quarter ending 31 March 2018: nil).
| 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 |
|
|---|---|---|---|---|
| Jun-18 | Mar-18 | Jun-18 | Mar-18 | |
| $M $M $M $M |
||||
| Residential mortgages | 1,250 - - |
|||
| Total exposures securitised during the period | 1,250 - - |
Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type
| Table 5B(i): Aggregate of on-balance sheet securitisation exposures by exposure type | sure type | |
|---|---|---|
| Jun-18 Mar-18 Exposure type $M $M |
Jun-18 | Mar-18 |
| Debt securities 1,242 1,292 |
||
| Total on-balance sheet securitisation exposures 1,242 1,292 |
Table 5B(ii): Aggregate of off-balance sheet securitisation exposures by exposure type
| Jun-18 | Mar-18 | |
|---|---|---|
| Exposure type | $M | $M |
| Liquidity facilities | 82 | 67 |
| Derivative exposures | 99 | 140 |
| Total off-balance sheet securitisation exposures | 181 | 207 |
PAGE 17
AS AT 30 JUNE 2018
SUNCORP
APS 330
TABLE 18: REMUNERATION DISCLOSURES
Table 18: Remuneration disclosures for the year ended 30 June 2018 will be included with the Group’s prudential disclosures for the quarter ended 30 September 2018, in accordance with the requirements of APS 330.
PAGE 18
SUNCORP
APS 330
TABLE 20: LIQUIDITY COVERAGE RATIO DISCLOSURE
| Total Unw eighted Value (Average) |
Total Weighted Value (Average) |
Total Unw eighted Value (Average) |
Total Weighted Value (Average) Total Unw eighted Value (Average) Total Weighted Value (Average) |
Total Weighted Value (Average) Total Unw eighted Value (Average) Total Weighted Value (Average) |
Total Weighted Value (Average) Total Unw eighted Value (Average) Total Weighted Value (Average) |
|---|---|---|---|---|---|
Total Unw eighted Value (Average) |
Total Weighted Value (Average) |
||||
| Jun-18 Jun-18 Mar-18 Mar-18 Dec-17 Dec-17 |
|||||
| $M $M $M $M $M $M |
|||||
| Liquid assets, of which: High-quality liquid assets (HQLA) 4,306 4,176 5,274 Alternative liquid assets(ALA) 4,400 4,398 3,498 |
|||||
| Cash outflows - - Retail deposits and deposits from small business customers, of w hich: 20,820 1,810 20,180 1,743 20,248 1,684 stable deposits 14,245 712 14,049 702 14,704 735 less stable deposits 6,575 1,098 6,131 1,041 5,544 949 Unsecured w holesale funding, of w hich: 4,764 3,407 4,853 3,435 4,349 3,043 operational deposits (all counterparties) and deposits in networks for cooperative banks - - - - - - non-operational deposits (all counterparties) 3,128 1,771 3,041 1,623 2,812 1,506 unsecured debt 1,636 1,636 1,812 1,812 1,537 1,537 Secured w holesale funding - 4 - 11 - 218 Additional requirements, of w hich: 8,049 1,654 8,687 1,863 9,446 1,839 outflows related to derivatives exposures and other collateral requirements 1,298 1,298 1,479 1,479 1,406 1,406 outflows related to loss of funding on debt products - - - - - - credit and liquidity facilities 6,751 356 7,208 384 8,040 433 Other contractual funding obligations 774 503 744 443 902 614 Other contingent fundingobligations 8,321 654 8,610 803 8,881 826 |
|||||
| Total cash outflows - 8,032 - 8,298 - 8,224 |
|||||
| Cash inflows Secured lending (e.g. reverse repos) 252 - 143 - 938 - Inflow s from fully performing exposures 800 529 802 502 758 470 Other cash inflow s 617 617 920 920 736 736 |
|||||
| Total cash inflows 1,669 1,146 1,865 1,422 2,432 1,206 |
|||||
| Total Adjusted Value |
Total Adjusted Value |
Total Adjusted Value |
|||
| Total liquid assets 8,705 8,574 8,772 |
|||||
| Total net cash outflows 6,886 6,876 7,018 |
|||||
| Liquidity Coverage Ratio (%) 126 125 125 |
PAGE 19
AS AT 30 JUNE 2018
SUNCORP
APS 330
The Liquidity Coverage Ratio ( LCR ) requires sufficient qualifying High Quality Liquid Assets ( HQLA ) to be maintained to meet expected net cash outflows under an APRA-prescribed 30 calendar day stress scenario.
SML has a tiered management limit structure for the LCR to ensure that there is always an adequate buffer to the APRA Prudential Limit of 100% and calculates the LCR position against these limits on a daily basis. The amount of liquid assets held considers the amount needed to meet prudential and internal requirements (including a variety of internal stress scenarios as part of the risk management framework) and a suitable buffer reflecting management’s preference.
Liquid assets included in the LCR comprise HQLA (cash, Australian Semi-government and Commonwealth Government securities) and alternative liquid assets covered by the Committed Liquidity Facility ( CLF ) with the Reserve Bank of Australia ( RBA ). SML received approval from APRA for a CLF of $4.7 billion for the 2018 calendar year (2017 calendar year: $3.8 billion). Assets eligible for the CLF include senior unsecured bank paper, covered bonds and residential mortgage backed securities that are repo-eligible with the RBA.
The main contributors to net cash outflows were modelled outflows associated with deposits and unsecured wholesale funding, offset by inflows from maturing loans. The net cash outflow is sought to be minimised by targeting funding with lower LCR runoff rates and managing the maturity profile of wholesale liabilities.
The daily average LCR increased over the June 2018 quarter to 126% (125% for the March 2018 quarter). The table provides detailed information of the average LCR for the preceding two quarters.
PAGE 20
AS AT 30 JUNE 2018
SUNCORP
APS 330
APPENDIX - DEFINITIONS
| Capital adequacy ratio | Capital base divided by total assessed risk, as defined by APRA |
|---|---|
| Common Equity Tier 1 | Common Equity Tier 1 capital (CET1) comprises accounting equity plus adjustments for intangible |
| assets and regulatory reserves | |
| Common Equity Tier 1 ratio | Common Equity Tier 1 divided by risk weighted assets, as defined by APRA |
| Credit value adjustment (CVA) | A capital charge that covers the risk of mark-to-market losses on the counterparty credit risk |
| Equity reserve for credit losses | The equity reserve for credit losses represents the difference between the collective provision for |
| impairment and the estimate of credit losses across the credit cycle based on guidance provided by | |
| APRA | |
| General reserve credit loss (GRCL) | The general reserve for credit losses is a reserve that covers credit losses prudently estimated but |
| not certain to arise over the full life of all the individual facilities based on guidance provided by | |
| APRA | |
| Liquidity coverage ratio | Liquid assets divided by the forecast net cash outflows during a 30-day simulated severe stressed |
| liquidity scenario | |
| Past due loans | Loans outstanding for more than 90 days |
| Risk weighted assets | Total of the carrying value of each asset class multiplied by their assigned risk weighting, as defined |
| by APRA | |
| Total assessed risk | Credit risk-weighted assets, off-balance sheet positions, market risk capital charge and operational |
| risk charge, as defined by APRA |
PAGE 21
AS AT 30 JUNE 2018