Suncorp Group Limited · ASX:SUN
Suncorp — Corporate Update (November 2008)
14 slides from Suncorp's corporate update, Nov 24, 2008
Slide 1: Teleconference introduction and purpose of update
Good morning and thank you all for attending this teleconference. With me I have Chris Skilton, who is of course our CFO and David Foster, who is our Group Executive for the Bank. I hope that by now you will have been able to access the short presentation that we have released to the market this mor
Slide 2: Steps taken to prepare for the credit crisis
Before I go to the update I do want to reinforce the point that we have taken a number of important steps in order to prepare our business for the challenges that would inevitably accompany the global credit crisis and the resultant slow down in economic activity. These are summarised on the slide a
Slide 3: Lending growth and balance sheet assets
As we pointed out at our full year result in August the strong lending growth achieved across FY08 was largely as a result of committed facilities continuing to draw down, particularly in the development finance portfolio. During the course of FY08 as we adapted our banking strategy and adjusted our
Slide 4: Banking revenues and expenses
So now to the trading update on slide 4 and starting with banking revenues and the pricing adjustments and re-negotiations initiated last year to reflect the new funding and risk paradigm have enabled us to protect margins - which are holding up well year to date. When you consider this improved mar
Slide 5: Overall lending portfolio composition
So we now move down the P&L to bad debts and slide 5 provides a snapshot of our overall lending portfolio. As you can see, the portfolio remains well diversified by industry and the geographic bias to Queensland is obviously beneficial given the relative strength of that economy. Unlike many of our
Slide 6: Credit review and stress testing of the book
However given the deteriorating market conditions we instigated a credit review of the overall book – stress testing each of the portfolios under a range of scenarios which are outlined on slide 6. This comprehensive review builds on a number of prior portfolio reviews, most specifically the review
Slide 7: Non-performing loans and impaired assets
Onto slide 7 and we had flagged previously that we expected NPL’s and impaired assets to increase and as you can see from this slide and the APS 330 disclosures that is the case. It is important though to point out the methodology employed in identifying impaired assets. Many of our customers have a
Slide 8: Bad debt expense estimate and provisioning
Moving onto slide 8 These 3 accounts also significantly impacted our first quarter provisioning. We are confident given the outcomes of the review, that credit quality remains sound and that we are taking all the appropriate steps to manage our exposure to this stage of the credit cycle. We are fort
Slide 9: Wholesale funding and deposits
Thanks John and good morning everyone As you know we had previously advised that, based on asset growth of around 10% for 2008/09, we’d require around $4 to $4.5 billion from the Wholesale Term markets. Since then a number of events have occurred. Firstly we’ve experienced a monumental shift in the
Slide 10: Capital position and Tier 1 ratio
To capital now and consistent with our APS 330 disclosures you can see from the slide that our Tier 1 ratio continues to improve and, at 8.99% at the end of September, compares very favourably with the other Australian banks. We note that the major banks tend to have Tier 1 ratios around 8%, even af
Slide 11: South East Queensland storm claims update
Thanks Chris Turning to slide 11 Before I conclude I’d like to update you on the storms that have affected South East Queensland over the past week. So far the group has received more than 13,000 claims as a result of these storms. Based on assessors reports and our experience of similar events in t
Slide 12: Updated full year banking guidance
So let me summarise our updated full year banking guidance which you can see is on slide 12. The strong first quarter performance in banking has given us the confidence to upgrade our profit before tax and bad debts. We now expect our lending growth to be closer to 5% than our previous forecast of 8
Slide 13: Conclusion and Group strategy
In conclusion, the past couple of months have been challenging for everyone associated with financial services – with market dislocation both here and abroad. For Suncorp, we had the added distraction of dealing with approaches from parties interested in acquiring our banking and wealth management b
Slide 14: Important information disclaimer
This report contains general information which is current as at 24 November 2008. It is not a recommendation or advice in relation to Suncorp-Metway Limited or any product or service offered by the Suncorp Group. This report should be read in conjunction with all other information concerning Suncorp