Banks boosted as Kiwis cave in

Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 6-Dec-19

The Reserve Bank of New Zealand will require the local subsidiaries of Australia’s four major banks to hold tier one capital that is equivalent to at least 16 per cent of their risk-weighted assets. They will also be required to hold total capital of 18 per cent, of which 13.5 per cent will have to be common equity tier one capital. However, the new rules will be implemented over a seven-year period, rather than the five-year time-frame that was initially proposed.

CORPORATES
RESERVE BANK OF NEW ZEALAND, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBS HOLDINGS PTY LTD, S&P GLOBAL RATINGS

Banks braced for RBNZ’s capital D-Day

Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 5-Dec-19

The Reserve Bank of New Zealand will announce its new tier-1 capital requirements for Australian banks’ NZ subsidiaries on 5 December. Cameron Bagrie from Bagrie Economics expects the central bank to push ahead with its previously flagged plan to increase minimum capital ratios to 16 per cent, despite warnings from banks that this is excessive. It is estimated that Australian banks would need to hold about $18bn worth of additional capital in New Zealand, which may reduce both their profits and dividends in Australia.

CORPORATES
RESERVE BANK OF NEW ZEALAND, BAGRIE ECONOMICS, EVANS AND PARTNERS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NEW ZEALAND BANKERS’ ASSOCIATION

Asset rule has banks with $13bn shortfall

Original article by Richard Gluyas
The Australian – Page: 21 : 23-Oct-19

Macquarie’s Victor German expects the Reserve Bank of New Zealand to increase the tier-1 capital requirements for Australian banks’ NZ subsidiaries to 16 per cent, as it has previously flagged. German says Westpac, ANZ and National Australia Bank will be hardest hit by the move, estimating that their combined capital shortfall will be around $13bn. However, the Commonwealth Bank’s capital impost is likely to be smaller than Macquarie had previously expected, which could allow it to return up to $3.5bn to shareholders.

CORPORATES
RESERVE BANK OF NEW ZEALAND, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MACQUARIE GROUP LIMITED – ASX MQG