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Europe’s biggest bank HSBC is making an aggressive push to win a larger share of Australian mortgages – and swooping on Suncorp’s banking operations may just be another way to do it.
Bell Potter analysts named HSBC's Australian subsidiary as a “potential and unconventional” suitor for Suncorp Bank, following a report about the Brisbane-based bancassurance giant calling in investment bankers to mull the banking unit spin-off.
“Our proposition is based on HSBC Australia’s recent and renewed interest in the domestic home loan space (not going anywhere soon with < 1% market share vs. SUN Bank’s 3%), increased branch representation across the capital cities and use of mortgage brokers, and desire for more market visibility," Bell Potter analysts said in a Street Talk report. “There would also be the huge opportunity to reduce surplus QLD branches (perhaps up to 50%) given SUN Bank’s 68% higher reliance on brokers. At the end of the day, we believe SUN Bank will add good quality mortgage and agribusiness books to HSBC Australia’s portfolio.”
While a merger between local players Bendigo and Adelaide Bank and Suncorp Bank could lead to improvements in terms of return on assets, return on equity, and earnings per share, Bell Potter said it was also worth considering what Suncorp Bank could do for HSBC in Australia, Street Talk reported.
