Suncorp has put more than $12 billion of loans in runoff as it moves out of corporate banking, corporate property finance and lease finance. Having foreshadowed a review of its banking portfolio, the group yesterday provided details of what it defines as core and non-core banking business.Speaking at the release of the group's results for the six months to December 2008, chief financial officer Chris Skilton said Suncorp's core banking business included personal customers, small business, agribusiness, commercial banking and "traditional middle market development finance and property investment."Skilton said: "The core portfolios are those in which Suncorp has a competitive advantage and a strong market position. "Non-core portfolios are those that are largely transaction driven, not relationship based, and while they may have delivered reasonable returns in the past they are no longer viable given the new capital and funding dynamics."The bank has ceased lending to new customers in the non-core businesses and will work with existing customers to reduce outstanding receivables on these portfolios over time."Suncorp has established a dedicated unit within the bank to manage the runoff, although Skilton does not expect it to happen quickly. "Our pragmatic view is that in the near term the ability for us to make significant inroads into the non-core portfolios will be limited."Suncorp's banking division yesterday reported a pre-tax profit of $97 million, down 68.4 per cent on the previous corresponding period. Income of $742 million was up 30.6 per cent on the previous corresponding period but impairment losses jumped from $16 million in December 2007 and $55 million in June last year to $355 million for the half.Skilton said he expected asset and revenue growth to be flat in the second half and also in the 2009/10 financial year. Margins will continue to fall because of higher funding costs."The tail winds that benefited the first half margin, such as the contraction in cash to bank bill spreads, the timing difference associated with hedge accounting and the contribution from Treasury, are unlikely to be repeated in the second half."The good news for the bank is that home and commercial lending growth was solid, as was the growth in retail deposits.Home loans were up 11.5 per cent on the previous corresponding period to $28 billion. System growth in home loans was 8.5 per cent over the period.Business loans were up 11.2 per cent to $26.4 billion. But in the six months since June business lending receivables fell by 2.2 per cent.Skilton said: "The bank has responded to deteriorating economic conditions by reducing its lending exposures over the December half."The bank has worked hard to shift the weight of its funding from securitisation and wholesale markets to retail deposits. Core retail deposits (net of treasury) increased by 17.6 per cent over the previous corresponding period. Retail deposits stand at $20.6 billion.Skilton said the bank suffered an outflow of deposits in September, in the general chaos that followed the failure of Lehman, but that was more than made up in October after the Australian