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Suncorp Bank has reported that, in the year ending June 2017, its SME loan book rose to $5.72 billion, up by 7 per cent on the prior financial year.
Releasing its full-year financial results for the 12 months ending 30 June 2017, the bank revealed that commercial loans for small and medium-sized enterprises (SMEs) increased from $5.45 billion to $5.7 billion as a result of “controlled growth over the year”.
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According to the bank, there were “targeted reviews” of key sectors and risk areas, including retail trading businesses, businesses impacted by weather events and the downstream impacts from the mining industry slowdown.
The majority of commercial loans (49 per cent) were for those under the $5 million range, while a quarter were for those between $10 million and $25 million and just over a fifth were for loans between $5 million and $10 million.
The bank noted that lending to inner-city apartment development (defined by developments within a five-kilometre radius of a city’s central business district) continues to be “monitored closely”. At balance date, loan balances for developments in these areas were $53 million.
Suncorp stated that it “predominately lends to known developers, and the majority of loans in this sector are under $20 million and completed within 12 to 18 months”.
Queensland made up 73 per cent of the book, followed by NSW (15 per cent) and "other" (12 per cent).
The largest proportion of the commercial portfolio was for property investment in QLD, which accounted for a quarter of the book.
Other commercial loans covered the professional services sector, hospitality and accommodation, and construction and development. Manufacturing and mining was responsible for the lowest proportion of the total portfolio (5 per cent).
Suncorp’s agribusiness portfolio also reported an increase in the last financial year, rising by 3.1 per cent to $4.49 billion.
The agribusiness portfolio focuses on medium to large family-owned farming operations with mid-size lending requirements in key target industries and geographies.
QLD had the largest proportion of the book, with 61 per cent ($2.74 billion), with the state’s beef industry being the largest sector it finances (making up 34 per cent of the book) across all states. Grain and mixed farming was the second largest sector, making up 29 per cent of the book ($1.3 billion).
[Related: ‘Considerable activity’ in commercial mortgage space: Equifax]
