Lending cools at Suncorp

The slowdown in demand for housing and business credit appears to be eroding growth prospects at Suncorp after the bank revealed a modest expansion in lending activity in the September quarter.

On an otherwise strong trading day for ASX-listed banking stocks, Suncorp's share price fell more than 1 per cent on concerns that its lending businesses have lost momentum.

Total lending grew by only 0.5 per cent during the quarter after a contraction in the size of the bank's business loan book.

"Business lending growth contracted slightly over the quarter, with moderate growth in our commercial and small business portfolios offset by a reduction in agribusiness lending following the repayment of debt," said chief executive, David Carter.

"We are targeting new business, across all sectors, in line with our risk appetite."

The bank's interest margin is also under pressure following a surge in wholesale funding costs earlier this year.

Suncorp now expects its net interest margin in 2019 to come in at the low end of earlier guidance.

The bank said recently that it expected NIM in the current year to fall somewhere between 1.8 to 1.9 per cent.

The share price closed down 17 cents to $13.83.