Suncorp's rates pledge
Taking a leaf out of its competitor's play book, Suncorp has promised to pass on the full impact of the next rate cut while announcing plans to merge its retail and business banking arms.
Suncorp will pass on the full impact of the next Reserve Bank rate cut not because it expects its cost of funds to fall, but to help turn around poor consumer sentiment.
Chief executive John Mulcahy told Business Spectator today that Suncorp's banking business would take a pragmatic view of the rate situation.
He said it was in the interests of Suncorp's insurance, banking and funds management business to help restore confidence in the economy among consumers and one way of doing this was by passing on the next RBA cut.
"We have never been a price setter on rates so we will follow the lead of the majors,” he said. "NAB has made its position clear so I think the majors will follow the RBA.”
Mulcahy said term funding costs remained high and those costs would not be affected by any RBA action.
He was speaking after the release of Suncorp's results for the year to June 30 which showed a 47.7 per cent decline to $556 million. The result was flagged in a continuous disclosure announcement at the beginning of this month.
Since then, two more significant developments have been announced. The first is the merger of the retail and business banking divisions under David Foster and second is the retirement of the head of personal insurance, Robert Belleville. Belleville joined Suncorp when the group acquired Promina last year.
The merger of retail and business banking is in keeping with actions taken by St George and Westpac, an initiative designed to better serve business customers. Mulcahy refused to quantify the financial benefits but said it was a logical move considering the businesses shared back office functions and had a single CFO.
Belleville will be replaced by long standing Suncorp executive Bernadette Inglis, currently group executive strategy, people and corporate services. Inglis joined Suncorp from the Commonwealth Bank in 2003 and has worked in a range of senior positions. She will be based in Melbourne.
Belleville, who will remain with Suncorp for three months and work with Inglis for a further nine months, is the latest in a series of former Promina executives to leave Suncorp. However, his design of the insurance operations will remain.
Mulcahy said the efficiencies to be gained from the merger of the retail and business bank would be augmented by the further use of Indian IT services firms Infosys and Satyam.
Chief executive John Mulcahy told Business Spectator today that Suncorp's banking business would take a pragmatic view of the rate situation.
He said it was in the interests of Suncorp's insurance, banking and funds management business to help restore confidence in the economy among consumers and one way of doing this was by passing on the next RBA cut.
"We have never been a price setter on rates so we will follow the lead of the majors,” he said. "NAB has made its position clear so I think the majors will follow the RBA.”
Mulcahy said term funding costs remained high and those costs would not be affected by any RBA action.
He was speaking after the release of Suncorp's results for the year to June 30 which showed a 47.7 per cent decline to $556 million. The result was flagged in a continuous disclosure announcement at the beginning of this month.
Since then, two more significant developments have been announced. The first is the merger of the retail and business banking divisions under David Foster and second is the retirement of the head of personal insurance, Robert Belleville. Belleville joined Suncorp when the group acquired Promina last year.
The merger of retail and business banking is in keeping with actions taken by St George and Westpac, an initiative designed to better serve business customers. Mulcahy refused to quantify the financial benefits but said it was a logical move considering the businesses shared back office functions and had a single CFO.
Belleville will be replaced by long standing Suncorp executive Bernadette Inglis, currently group executive strategy, people and corporate services. Inglis joined Suncorp from the Commonwealth Bank in 2003 and has worked in a range of senior positions. She will be based in Melbourne.
Belleville, who will remain with Suncorp for three months and work with Inglis for a further nine months, is the latest in a series of former Promina executives to leave Suncorp. However, his design of the insurance operations will remain.
Mulcahy said the efficiencies to be gained from the merger of the retail and business bank would be augmented by the further use of Indian IT services firms Infosys and Satyam.
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