The Suncorp Group Ltd (ASX: SUN) share price is pushing higher on Wednesday.
In morning trade, the insurance and banking giant’s shares are up 2% to $11.46.
Why is the Suncorp share price rising?
The catalyst for the rise in the Suncorp share price on Wednesday appears to have been the release of its banking update this morning.
According to the release, Suncorp Bank’s home lending portfolio continued to build through the September quarter. During the three months, it increased $446 million or 1.0% (3.9% annualised).
Management notes that momentum in home lending lodgements continued, with total lodgements 40% higher than the prior corresponding period and 18% higher than the June quarter.
Suncorp advised that the increase in home lending lodgements was driven by the bank’s consistent competitive offerings, improved turnaround times, and enhanced credit assessment efficiency.
Whereas its home lending growth was supported by a positive net refinance rate, the continued delivery of its targeted program of work to improve customer and broker experiences, and the simplification of its origination process.
Positively, the bank maintains a high-quality and conservatively positioned home lending portfolio, remaining weighted towards owner occupiers, principal, and interest repayments and loans with a loan-to-valuation ratio (LVR) below 80%.
Another positive was that it household deposit growth was broadly in line with the strong system growth experienced during the quarter. This was assisted by a reduction in household spending due to lockdowns in NSW and Victoria.
Things weren’t as positive for business lending, which contracted $60 million or 0.5% (2.1% annualised). This was due to a reduction in the commercial loan portfolio partially offset by growth in agribusiness lending.
Anything else?
Finally, total impairment charges for the quarter were a net release of $1 million, gross impaired assets decreased $11 million over the quarter to $169 million, and total past due loans not impaired decreased by $99 million to $451 million.
Management advised that the improved arrears position is attributable to the cohort of customers exiting hardship arrangements and returning to performing status, following earlier COVID-19 temporary loan deferral assistance. The strong housing market has also resulted in increased voluntary borrower sales.
Following today’s gain, the Suncorp share price is now up 16% in 2021.
The post Suncorp (ASX:SUN) share price higher on banking update appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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