Suncorp Bank’s swansong result highlights the task ahead for ANZ, defending a franchise and extracting value from a business beset by margin headwinds and increased expenses.
One aggravating facet of Suncorp’s (and ANZ’s) expense challenges will be “uplifting the maturity of its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) systems and controls,” to cite the contingent liabilities disclosure in Suncorp Group’s December 2023 half-year report.
“In recent periods,” Suncorp said, “there were a number of non-compliance instances identified and disclosed to various regulatory authorities including ASIC, APRA, AUSTRAC, Department of Foreign Affairs and Trade, the Australian Sanctions Office” and other regulators.
“An assessment of the likely cost of these matters has been made on a case-by-case basis but cannot always be reliably estimated.”
The bank reported a net profit of A$192 million for the December half, down from $256 million in December 2022.
The net interest margin decreased by 23 basis points to 1.80 per cent, “attributed to increased funding costs and asset margin contraction from persistent competition in both deposits and lending markets”.
The bank’s cost-to-income ratio was 58.4 per cent, a blowout from 49.9 per cent.