Optimistic Suncorp Bank sets a new path

Suncorp Bank has had its most creditable half-year and full-year earnings in a long time, with the bank producing a return on equity of in excess of 12 per cent over both the last six months and 12 months.

Net profit increased 55 per cent to A$354 million over the year to June 2015.

The net interest margin improved by 13 basis points to 1.85 per cent.

Suncorp Group chief executive Patrick Snowball, speaking on a media call yesterday, said: "The bank is a stunning turnaround story."

"It was in strife five years ago. We adjusted the risk, cleaned up the book and re-priced it."

Growth in the last year may have been unbalanced, by design. Total lending assets increased below system by 3.9 per cent to $51.9 billion, while transaction account deposits increased 25 per cent to $6.6 billion.

"Significant resources have been dedicated to risk management capability, culture and technology under the Basel II Advanced Accreditation program and the development of the Ignite banking platform," the bank said.

Short-term aspirations include plans for the bank to "leverage the capital, funding and capability strengths of the Suncorp Group as it undertakes a significant change program in 2016 to deliver a new bank for 2017."

Suncorp said this investment would be based on "four strategic pillars": its Ignite customer experience program; risk management; business intelligence; and "group customer extensions".