Amid ongoing speculation that Suncorp will sell its bank to focus on insurance, the group has added commercial property lending to “non-core” banking business it is winding down.

Suncorp’s non-core portfolio is now valued $16.8 billion. It now includes corporate banking, corporate property and lease finance, which are “no longer viable given the new capital and funding dynamics”.

Core banking portfolios, those in which Suncorp sees a competitive advantage and strong market position, are personal, commercial/small-to-medium enterprise and agribusiness.

But JP Morgan analyst Siddharth Parameswaran says the move doesn’t mean a bank sale is imminent.

“I don’t think a sale of the bank is the real reason for doing this, although it definitely helps,” he told insuranceNEWS.com.au. “Basically they’re doing what an eventual purchaser would do.

“But even if they don’t sell it, the bank is a much more viable operation going forward, given that credit conditions have changed so dramatically.

“There are markets where they don’t have the advantage of the reach or control of the majors and they can’t afford to wholesale fund and some of these divisions between the margins are too thin.”