The banks have outlined the underlying performance of their business lending divisions in their full-year 2018 financial results, with the two banks showing opposing trends for their business lending.
Both Commonwealth Bank (CBA) and Suncorp released their results this week.
CBA's 2018 full-year (FY18) results, released on Wednesday (8 August), reported negative business lending growth of 0.6 per cent in FY18, compared with 3.3 per cent positive growth in FY17, with CBA’s business lending activity 3.8 per cent below system (which is currently at +3.2 per cent).
Based on figures from the Reserve Bank of Australia (RBA), CBA’s share of the business lending market also dropped from 16.5 per cent to 15.9 per cent over the same period. Data from the Australian Prudential Regulation Authority (APRA) also noted a decline in the bank’s share of the business market from 18.6 per cent to 17.8 per cent.
Conversely, Suncorp’s SME lending portfolio increased from $5.7 billion in FY17 to $6.4 million in FY18.
SME lending also grew as a share of Suncorp’s total lending portfolio from 10 per cent in FY17 to 11 per cent in FY18.
Property investment made up the largest portion of SME finance settlements processed by the non-major in FY18 (35 per cent).
Meanwhile, loans to NSW SMEs represented the largest portion of its finance flows (71 per cent).
Suncorp’s results also revealed that its agribusiness lending portfolio remained stable at $4.5 billion, with the majority of such loans approved for borrowers in Queensland (63 per cent).
Overall profit performance
CBA’s net profit after tax (NPAT) took a hit over FY18, falling by 4.8 per cent to $9.23 billion. CBA CEO Matt Comyn attributed the decline in profit growth to “one-off” payments, which included CBA’s $700 million AUSTRAC penalty, the $20 million settlement paid to ASIC for alleged bank bill swap rate (BBSW) rigging, and $155 million in regulatory costs incurred from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“There has been a number of one-off items that have impacted the result, including a couple of large penalties that we have resolved. If you strip some of those out, actually the result looks more from an underlying perspective up 3.7 per cent,” Mr Comyn said.
Suncorp Group’s total net profit after tax (NPAT) also fell, dropping by 1.4 per cent, from $1.07 billion in FY17 to $1.05 billion in FY18.
According to the non-major, its profit loss was attributable to “accelerated investment of $146 million in the marketplace”, and a “four-fold increase in regulatory costs to $54 million”.
[Related: Suncorp update SME loan terms]