ASX announcement

22 May 2017

Suncorp Bank APS330 Update

Suncorp Bank today provided its quarterly update on Bank assets, credit quality and capital as at 31 March 2017, as required under Australian Prudential Standard 330.

The home lending portfolio grew modestly over the quarter, reflecting challenging market conditions.

Suncorp Banking and Wealth CEO David Carter said the Bank continued to focus on targeted segments of the market, prioritising risk selection and quality, and was well positioned in its standing relative to regulatory changes.

"We responded early to signals by the regulators to improve our position in relation to changes to macro-prudential settings, particularly APRA's interest-only and investor lending," Mr Carter said.

"We have been deliberate in shaping the portfolio through our focus on risk selection and expect modest growth in home and business lending as our competitors align to more conservative positions."

Business lending growth was flat, with strong new business volumes offset by repayments from successfully completed property developments and favourable conditions for agribusiness customers leading to repayment of loans.

Credit quality across Suncorp Bank's business loan portfolio remains sound, with very little exposure to the higher risk lending segments of inner-city apartments and businesses affected by the resources industry slowdown.

The benefits of prudent risk management are reflected in the continued strong credit quality performance over the quarter, with impairment losses of $7 million, or 5 basis points of gross loans and advances (annualised).

The Bank's funding strength was demonstrated during the quarter through the successful pricing of a $1.25 billion Residential Mortgage-Backed Security (RMBS) and an increase in the Net Stable Funding Ratio (NSFR) position, closing at 109%.

Following the payment of the interim FY17 dividend to Suncorp Group Limited, the Bank's Common Equity Tier 1 (CET 1) ratio continues to be strong at 9.19% and remains above the target range of 8.5% to 9.0%.

Suncorp is also in the process of determining the impacts on the business, following several announcements in the Federal Budget impacting the financial services sector.

"Australia has a strong banking system and Suncorp supports the principles of the Financial Services Inquiry to achieve competitive neutrality," Mr Carter said.

"The Treasurer announced two measures that have the potential to support competitive neutrality - the Bank levy and the harmonisation of supervision of the ADI and non-ADI sector.

"These measures have the potential to further improve the effectiveness of the macro prudential settings that have recently been introduced and will go some way to realising a more level playing field."

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Suncorp-Metway Limited - ABN 66 010 831 722 - Level 28, 266 George Street, Brisbane Qld 4000 suncorpgroup.com.au

Ends

For more information contact:

Media

Alexandra Foley 0419 794 294

Investors

Andrew Dempster 0497 799 960

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Suncorp-Metway Limited - ABN 66 010 831 722 - Level 28, 266 George Street, Brisbane Qld 4000 suncorpgroup.com.au

SUNCORP GROUP LIMITED ABN 66 145 290 124

SUNCORP BANK APS 330

for the quarter ended 31 March 2017

RELEASE DATE: 22 MAY 2017

SUNCORP BANK

APS330

for the quarter ended 31 March 2017

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 2017 (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 22 May 2017. 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, Andrew Dempster

Brisbane Queensland 4000 Acting Head of Investor Relations

Telephone: (07) 3362 1222 Telephone: (02) 8121 9206

www.suncorpgroup.com.au andrew.dempster@suncorp.com.au

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Suncorp Group Ltd. published this content on 22 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 21 May 2017 23:24:15 UTC.

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