City Pacific's Niche Business Strategy Acknowleged
21st May, 2007
City a key lending market for Suncorp
SUNCORP'S Queensland heritage has placed it right in the thick of the state's development boom.
Stuart McDonald, group executive of business banking, said Suncorp – a company with building society origins – continued to maintain the edge over another former building society, St George Bank, in the business stakes.
Suncorp pips St George, Australia's fifth-largest bank, in the business banking sector.
Much of its success is seeded in the Queensland market, which, Mr McDonald said, continued to perform well in a patchy national scene.
He said Suncorp had pioneered investment in the management rights industry, particularly on the Sunshine Coast, which remains a major part of its lending portfolio.
Mr McDonald, whose career background includes foreign exchange dealing for National Australia Bank, has been with Suncorp for the past 12 years and has been head of business banking for the past 18 months.
He was on the Gold Coast yesterday to share an informal lunch with some of the city's developers, including Jim Raptis and John Fish.
Suncorp's business division has grown significantly on the back of the state's development boom, with the recent addition of 10 new staff, some of whom will be posted at its Corporate Centre base at Bundall.
Mr McDonald sees the Gold Coast as a key market for the bank, more so now that the city has weaned itself off the boombust cycle that was so prevalent in the '70s and '80s.
He said the Gold Coast economy had attained a critical mass and had become much more diversified.
"It's not only about holidays and, once you get that diversity in the economy, you're going to be more sustainable."
But, Mr McDonald acknowledges that where there is opportunity there is also competition, particularly from a growing band of finance operations, such as the listed company City Pacific, and mortgage brokers.
"Competition in banking generally has been huge over the last four or five years," he said.
"It is the strongest I have ever seen it.
"City Pacific tends to get involved in certain niches and our business is modelled around trying to find niches as well.
"Property development is a very big business for us.
"And, because we know what we're doing, so deeply, we can make transactions happen where others can't.
"It's nothing for the head of credit, the person making the decision, to jump into a car and walk over the site to get his head around it."
As for the property market, Mr McDonald said he saw continued strength, particularly in Queensland.
This is despite a slight increase in lender stress, although this is more notable in Victoria and NSW.
"But we are only coming back to long-term trends, and we are coming off a very low base." said Mr McDonald.
