APRA announces additional loss-absorbing capacity requirements
In an announcement today, the Australian Prudential Regulation Authority (APRA) finalised its loss-absorbing capacity requirements.
APRA said it will require domestic systemically important banks (D-SIBs), including ANZ, to increase their Total Capital by a further 1.5% of risk weighted assets (RWA) by January 2026. Inclusive of the previously announced interim increase of 3%, this will result in a total increase to the minimum Total Capital requirement of 4.5% of RWA.
ANZ expects to be able to meet the additional Total Capital requirement through Tier 2 Capital.
The amount of the additional Total Capital requirement will be based on ANZ’s actual RWA as at January 2026, including the final impact of the revisions to APRA’s capital framework announced on 29 November 2021.
APRA noted “Given changes to RWA from the ADI capital reforms, the lower end of the range in dollar terms broadly equates to a requirement of 4.5 percentage points of RWA under the new capital framework, in place from 2023”.
APRA’s full announcement can be found on its website apra.gov.au Further details on ANZ’s Tier 2 Capital profile as at 30 September 2021 can be found on page 85 of the ANZ Full Year Results Investor Discussion Pack available at anz.com/shareholder/centre/reporting/results-announcement/.