04/06/2008 - 22:00

Suncorp shines its light on the west

04/06/2008 - 22:00


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A spate of changes among Western Australia’s financial institutions has redefined the sector over the past couple of years.

Suncorp shines its light on the west

A spate of changes among Western Australia's financial institutions has redefined the sector over the past couple of years.

Mergers and acquisitions have led to some lenders opening new branches, while other brands have faded away.

WA's strong economic growth has also put the state on the radar for several bigger players, which have expanding their presence locally.

The latest group to tailor its growth strategy around the WA market is Queensland-based Suncorp, which will open 14 retail branches locally over the next two years.

While the company has offered business banking in the local market since 2000, particularly in the property sector, Suncorp's retail expansion will rank WA third in terms of branch numbers, after Queensland and NSW.

Suncorp group executive retail banking, David Foster, said the bank earmarked WA as its next logical market for growth about 15 months ago, due to its resources-driven economy being similar to Queensland's.

"We're taking a very long-term view of WA. We think it's similar to Queensland and over the long term there will be a sustained outperformance of the other states," Mr Foster told WA Business News.

He said a shuffling in the make-up of the local sector had also prompted the move, with the Home Building Society-Bank of Queensland merger believed to have created an opening for another player.

Suncorp currently has about 10,000 retail customers in WA, a number it hopes to expand significantly.

In Queensland, the bank has between 15,000 and 20,000 customers per branch.

"From a mortgage broker perspective, we probably have about 5 to 7 per cent market share in WA. We clearly see an opportunity to grow that," Mr Foster said.

Suncorp's move comes at a time when the structure of the local market has been substantially rearranged.

Some of the bigger players, such as HBOS-owned BankWest, have expanded locally as well as interstate, while others have grown their presence through acquisitions.

Home Building Society's purchase of StateWest Credit Society in 2006 set the ball rolling in recent times, before Home became a target itself and was acquired by Bank of Queensland in 2007.

This year it was United Credit Union's turn, announcing in April that it would be merging with Adelaide-based credit union, Community CPS Australia.

However, Westpac's proposed merger with St George Bank could trump it if it proceeds.

The Rudd government's renewed commitment this week to the four pillars policy, which prevents the big four banks from merging, may also leave BankWest as a prime target for a takeover.

While other eastern states banks, such as Bendigo Bank, have expanded their presence, a number of non-bank lenders have moved into the market.

Wizard Home Loans has opened 16 branches in WA, while Aussie and Resi Mortgage Corporation both have three.

Suncorp will open its first branch in Armadale this month, with a further six opening by Christmas.

It has also appointed Western Australian Michael Goynich as state manager for Suncorp Retail Banking.

Suncorp opened its first retail branch in 2003 at 66 St Georges Terrace, and is preparing to open another site across the road at number 44.

By the end of 2008, the group will have opened branches at Westfield's Carousel, Innaloo and Whitford City shopping centres, as well as Joondalup and Morley.

Its Joondalup centre will be one of five small business centres.

The company currently employs 360 people in WA, mainly through its insurance subsidiaries, and will add a further 80 staff locally.


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