Risk Weight Floors for NZ Mort & Farm Lending Portfolios

Australia and New Zealand Banking Group Limited ABN 11 005 357 522


News Release
For release: 29 July 2019

Risk Weight Floors for New Zealand Mortgage and Farm
Lending Portfolios (Level 2)

ANZ today announced new risk weight floors will be applied to the New Zealand mortgage
and farm lending portfolios for Level 2 reporting, following notification by the Australian
Prudential Regulation Authority (APRA).

This was in response to an increase in risk weights applied by the Reserve Bank of New
Zealand (RBNZ) for these portfolios
1
.

The impact is equivalent to a 20 basis point reduction in ANZ’s Level 2 Common Equity Tier
1 (CET1) capital ratio
2
. The changes are effective 30 September 2019.

There is no impact on ANZ’s Level 1 capital ratio, and the higher risk weights for New
Zealand were effectively incorporated into the Level 1 ratio as at 31 March 2019.

Level 1 is the ADI excluding subsidiaries; Level 2 is the Group including banking
subsidiaries.

As of the 30
th
June 2019, ANZ’s Level 2 CET1 capital ratio was 11.8%, well in excess of
APRA’s Unquestionably Strong Requirement of 10.5%.

On a pro-forma basis, inclusive of the above changes as well as the recently announced
increase in Operational Risk capital and the implementation of the revised Counterparty
Credit Risk (SA-CCR) prudential standard, ANZ’s Level 2 CET1 ratio is 11.3%.


For media enquiries contact: For analyst enquiries contact:

Stephen Ries, +61 409 655 551 Cameron Davis, +61 421 613 819














1
As noted in ANZ Bank New Zealand Limited Registered Bank Disclosure Statement released in May 2019.
2
The new floors result in risk weights for New Zealand mortgages being broadly consistent with Australian
mortgages.