Suncorp : APS330 31 March 2016

32b9ce9b-be3c-42c1-8214-d4e104d4fcfa.pdf ASX announcement

Suncorp Bank APS330 Update

3 May 2016

Suncorp Bank today provided its quarterly update on Bank assets, credit quality and capital as at 31 March 2016, as required under Australian Prudential Standard 330.

Suncorp Bank's lending assets remained broadly flat over the quarter at $52.9 billion as the Bank maintained a disciplined approach in a very competitive pricing environment.

Impairment losses decreased to $4 million, representing an annualised rate of just 3 basis points of gross loans and advances. The low result has benefited from a combination of one- off improvements and better asset quality in the Agribusiness and Commercial/SME portfolios.

Implementation of the new loan collections system has resulted in a temporary increase in retail past due loans, with gross non-performing loans increasing to $606 million. The Bank expects this position to normalise over coming months.

Suncorp Bank CEO, John Nesbitt, said the ongoing reduction in impairment losses reflected the benefits of the investment in risk management capability, culture and technology in operating under the Basel II Advanced Accreditation Program.

"The Bank's Advanced Accreditation Program has materially improved risk selection and business performance. We are not seeing any material impact on credit quality from the geographic regions impacted by the mining slowdown or the recent high profile corporate collapses, however we continue to actively assess our exposures," Mr Nesbitt said.

"Changes to our systems, which resulted in the increase in gross non-performing loans in the retail portfolio, were successfully remediated during the quarter. Our targeted analysis of the portfolio leaves us confident the underlying performance of the home loan portfolio remains sound."

Retail lending was flat at $43.4 billion, with 87% of new loans written at an 80% or less loan-to- value ratio. A successful home lending campaign launched in March 2016 is expected to drive growth over the fourth quarter with the Bank targeting annual growth in its retail lending portfolio of between 1 and 1.3 times system.

"The business lending portfolios returned to modest growth with the Bank focused on quality lending and risk selection," Mr Nesbitt said.

The capital position of the Bank remained strong with Common Equity Tier 1 (CET1) ratio increasing to 9.08%, slightly above the 8.50% to 9.00% target range.

ENDS

For more information contact:

Media: Amy McDonald on 0403 058 462

Analysts/Investors: Mark Ley on 0411 139 134

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Suncorp Group Ltd - ABN 66 145 290 124 - GPO Box 1453, Brisbane QLD 4001 www.suncorpgroup.com.au

Suncorp Group Limited ABN 66 145 290 124 Suncorp Bank APS 330 for the quarter ended 31 March 2016

Release date: 3 May 2016

Basis of preparation

This document has been prepared by Suncorp Bank to meet the disclosure obligations under the Australian Prudential Regulation Authority (APRA) Australian Prudential Standard (APS) 330 Public Disclosure.

Suncorp Bank is represented by Suncorp-Metway Limited (SML) and its subsidiaries. SML is an authorised deposit-taking institution (ADI) and a wholly owned subsidiary of Suncorp Group Limited. Suncorp Group is represented by Suncorp Group Limited and its subsidiaries.

Other than statutory information required by a regulator (including APRA), all financial information is measured in accordance with Australian Accounting Standards. All figures have been quoted in Australian dollars and have been rounded to the nearest million.

This document has not been audited nor reviewed in accordance with Australian Auditing Standards. It should be read in conjunction with Suncorp Group's consolidated annual and interim financial reports which have been either audited or reviewed in accordance with Australian Auditing Standards.

Figures relate to the quarter ended 31 March 2016 (unless otherwise stated) and should be read in conjunction with other information concerning Suncorp Group filed with the Australian Securities Exchange (ASX).

Disclaimer

This report contains general information which is current as at 3 May 2016. It is information given in summary form and does not purport to be complete.

It is not a recommendation or advice in relation to the Suncorp Group and Suncorp Bank or any product or service offered by its entities. It is not intended to be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.

The information in this report is for general information only. To the extent that the information may constitute forward-looking statements, the information reflects Suncorp Group's intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices at the date of this report. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which are beyond Suncorp Group's control, which may cause actual results to differ materially from those expressed or implied.

Suncorp Group and Suncorp Bank undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report (subject to ASX disclosure requirements).

Registered Office Investor Relations

Level 28, 266 George Street, Mark Ley

Brisbane Queensland 4000 Head of Investor Relations

Telephone: (07) 3362 1222 Telephone: (02) 8121 1221

www.suncorpgroup.com.au mark.ley@suncorp.com.au

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APS 330

for the quarter ended 31 March 2016

Table of contents

Suncorp Bank

Basis of preparation 2

Overview 4

Outlook 4

Loans and advances 5

Retail lending 5

Business lending 6

Impairment losses on loans and advances 6

Impaired assets 7

Non-performing loans 8

Provision for impairment 9

Gross non-performing loans coverage by portfolio 10

Appendix 1 - APS 330 tables 11

Appendix 2 - Suncorp Bank updated slide information 19

Appendix 3 - Definitions 23

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