ANZ notes APRA’s loss absorbing capacity discussion paper

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
News Release
For Release: 8 November 2018

ANZ notes release of APRA’s loss-absorbing capacity
discussion paper

ANZ today noted the release of the Australian Prudential Regulation Authority’s (APRA)
discussion paper titled “Increasing the loss-absorbing capacity of ADIs to support orderly
resolution”.

The paper is in response to recommendation three of the Final Report of the 2014 Financial
System Inquiry (FSI)
1
.

The paper proposes an increase in Total Capital requirements of between 4% and 5% of
risk-weighted assets (RWA) for domestic systemically important banks (D-SIBs), such as
ANZ. Based on ANZ’s RWA of $391bn as at 30 September 2018, this represents an
incremental increase in the Total Capital requirement of approximately $16 billion to $20
billion, with an equivalent decrease in other senior funding.

APRA anticipates that D-SIBs would satisfy the requirement predominantly with additional
Tier 2 capital. D-SIBs will need to satisfy the new requirement by 2023
2
.

ANZ intends to consult with APRA and provide a response.


For media enquiries contact: For analyst enquires contact:
Nick Higginbottom
+61 403 936 262
Cameron Davis
+61 421 613 819





1
Pp 67-75 Final Report of the FSI which recommended that the Government “implement a framework for minimum
loss absorbing and recapitalisation capacity in line with emerging international practice, sufficient to facilitate the
orderly resolution of Australian authorised deposit-taking institutions and minimise taxpayer support” .
2
D-SIBs have an implementation period of four years from the release of the final Total Capital requirements
(expected in 2019)