Suncorp home lending slumps but things are looking up on the farm

Suncorp’s home lending fell by $455 million for the September quarter, a result that was partially offset by an increase in its business lending portfolio.

Nov 10, 2020, updated Nov 10, 2020
Agribusiness lending on the rise for Suncorp. (Photo: Noah Buscher Unsplash)

Agribusiness lending on the rise for Suncorp. (Photo: Noah Buscher Unsplash)

But there were also good signs for the Queensland economy in the Suncorp report which outlined a revival in commercial property lending and in the agribusiness sector. Its deposits have also soared by 9.2 per cent or $31 billion.

The Brisbane-based banking and insurance group said its home lending lodgement and settlement rates increased as a result of improved processes, however this was offset by higher levels of customer repayments and refinancing as a result of increased competition.

“Business lending grew by $116 million or 1 per cent, driven by growth in commercial loans and agribusiness lending,” Suncorp said.

“Commercial lending growth was predominantly driven by lending to established commercial property investment clients while agribusiness growth was driven by restocking, increased cropping activity and asset purchases.”

Suncorp has $3 billion of loans under temporary deferral, which is about 5 per cent of its total lending. The company said more than half, or $1.7 billion, was home lending and $823 million was in the small to medium enterprise sector.

Suncorp retains a gloomy outlook for the economy with its forecast for unemployment at a 10 per cent peak, but it has pared back its forecast contraction in the economy from 7.3 per cent to 6.4 per cent. It also predicts a 7.7 per cent downturn in house prices and 14.2 per cent fall in commercial property prices.

Suncorp said the growth in at-call deposits had been driven by its zero account keeping fees, competitive rates and the ongoing upgrade of its online banking.

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