Suncorp Group [ASX:SUN] shares were flat on Monday after the financial services conglomerate released a trading update.
On a red day for the ASX 200, which saw risk-on assets heavily sold down, the blue-chip held steady.
SUN shares were flat in afternoon trade, while the benchmark ASX 200 was down 1.25%:
Source: Tradingview.com
Suncorp’s trading report
This morning, Suncorp provided its March quarterly update.
Suncorp said the results confirm the bank ‘continues to make strong progress against its strategic priorities, particularly within the home lending portfolio, with $803 million of growth reported in the March quarter.’
The $803 million growth over the quarter marked a 6.9% annualised increase.
Growth during February and March exceeded expectations, with the company recognising positive net refinance rates and seeing improvements to the system.
Business lending also saw growth, a rise of $91 million this quarter, reflecting a 3.3% annualised increase.
Commercial lending grew by $122 million, which Suncorp believes was driven by ‘frontline banker activity’, ‘existing customer drawdowns and new customer lending.’
$28 million in agribusiness growth has been attributed to ‘confidence in the sector due to heightened commodity prices and drawdowns for tax planning ahead of the financial year end.’
Household deposit growth, however, was reported to sit under system growth levels.
111 hardship arrangements occurred due to flooding impacts in QLD, NSW, and the ACT, 16% of the hardship claims required deferred or reduced payments or conversion and interest adjustments.
Suncorp’s Liquidity Coverage Ratio and Net Stable Funding Ratio came to 143% and 142%, respectively, for the March 2022 quarter, with the bank’s Committed Liquidity Facility siting at $1.5 billion, to reduce $500 million in May 2022, with further reductions in September and January 2023.
Sun’s Common Equity Tier 1 ratio is at 9.32%, within the target range of 9–9.50%, reflecting healthy capital.
SUN share price outlook
Suncorp Bank CEO Clive van Horen said the company’s growth momentum in home lending reflected a conscientious effort to improve customer and broker experiences.
Van Horen offered his thoughts on the company’s quarter:
‘Turnaround times have been consistently competitive over the quarter, reflecting improved back-end processes to support the higher lodgement volumes.
‘Growth momentum also extended to the business lending portfolio which grew $91 million during the March quarter and over $130 million in April.’
The Suncorp CEO was also upbeat about the bank’s ‘conservative’ lending portfolio, pointing out that the company’s impairment expense came in at $1 million for the quarter.
As current events create widespread volatility, they also create buying opportunities as a jittery market begins to offer more mispricing opportunities.
But how do you take advantage of any potential mispricing in the market?
Check out our free report ‘How to Find Bargain-Priced ASX Superstars after a Big Sell-Off’ to find out more.
Regards,
Kiryll Prakapenka,
For The Daily Reckoning Australia
