Once for sale and reporting for FY2020 with a messy mix of rising cost ratios and a declining market share, Suncorp Bank is showing “the early signs of improvement”, or so group CEO Steve Johnston said on Friday.
Suncorp’s banking and wealth division reported a net profit of A$242 million over the year to June 2020, down 34 per cent on 2019. The bank’s collective provision doubled over the year to $255 million, most relating to a Covid-19 overlay first recognised in the March quarter.
Home lending “contracted 2.8 per cent over the year, reflecting slow system growth, strong competition for new and existing business and elevated, albeit recently improving, loan processing turn-around times,” Johnston told an investor briefing.
The bank’s net interest margin lifted by 4 basis points to 1.94 per cent, “driven by growth in digitally originated at-call deposits,” he said.
Operating costs increased 3.4 per cent, which the bank said was primarily due to an increase in regulatory and technology expenses
Johnston said “our priorities for the bank are consistent with those I outlined 12 months ago.
“We need to win in home lending, particularly in Queensland; accelerate digital and everyday banking; invest in open banking and simplify the portfolio.”
Asked by Bell Potter analyst TS Lim: “if you rate the bank out of 10, what would you give the bank?”, Johnston dodged.
“I’d probably not give it a rating out of 10. I’d go back to the report cards which I used to get when I was at school which is; great potential but could do better.”