Non-major bank Suncorp has formally put its support behind the government’s proposed bank levy, putting it
at odds with the views of the big four banks.
In a statement delivered in the lender’s quarterly financial results on Monday (22 May), banking and wealth CEO David Carter spoke on the levy as well as expanded powers by regulators such as the
Australian Prudential Regulation Authority (APRA) to the non-bank 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,” he said.
The bank is currently in the process of determining how these Budget announcements would impact the financial services sector.
Suncorp reported modest growth in its home lending portfolio, saying challenging market conditions were to blame.
Total housing loans (including securitised home loans and housing bonds) sat at $44.3bn in the quarter ending March 2017. This was a small increase of 2.8% from the same period the year before.
From January to March 2017, 73% of loans originated were owner-occupier while 27% were investor. This was a significant shift compared to the third and fourth quarters for the 2016 calendar year which recorded owner-occupier levels of 66% and 67% respectively.
Originations for interest-only loans have also been dropping at Suncorp. A level of 24% was recorded in the first quarter this year compared to 29% and 28% in the third and fourth quarters of 2016 respectively.
Year-on-year growth of investor mortgages at the bank is currently 7.1%, well below APRA’s supervisory speed limit of 10%.
“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,” 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.”
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