Financial Performance and Remediation Update
LOSS-ABSORBING CAPACITY
•
LOSS-ABSORBING CAPACITY
Based on the Group's RWA and Total Capital position as at 30
September 2021, the incremental Group Total Capital requirement
prior to January 2024 is approximately $3.0bn
$1.8bn of surplus provisions are eligible for inclusion in Tier 2 Capital
$1.5bn of NAB's existing Tier 2 Capital has optional redemption dates
prior to January 20241
Group RWA
Sep-21 ($bn)
417.2
Tier 2 Requirement (5% by Jan-24) 2
Existing Tier 2 Capital (4.27%)
Current Shortfall
20.8
17.8
3.0
APRA CHANGES TO MAJOR BANKS' CAPITAL STRUCTURES³
CET1 buffer/
surplus ~5%
CCB6
3.5%
CET1 minimum
requirement
4.5%
Total Capital 18.91%
T2, 4.27%
AT1, 1.64%
CET1, 13.00%
NAB Sep 2021
Total Capital 17.0%
T2, 5.0%
AT1, 1.5%
CET1 Surplus 4,5,
2.5%
CCB6, 3.5%
CET1, 4.5%
Jan 2024 LAC Requirements
NAB TIER 2 ISSUANCE AND PORTFOLIO DIVERSIFICATION
NAB TIER 2 MATURITIES (TO FIRST CALL')
JPY 1%
GBP 7%
SGD 3%
CAD 7%
USD 47%
AUD 35%
Bullet
39%
Callable
61%
($bn)
WAM 7.9 yrs (RTM)
8.4
2.4
0.1
1.4
1.7
1.0
1.1
• In FY21, NAB issued $5.6bn of Tier 2. NAB's FY22 Tier 2 issuance is
expected to be approximately $3-4bn
FY22
FY23
FY24
FY25
FY26
FY27
>FY27
(1) Subject to the prior written approval of APRA
(2) Ahead of January 2024 APRA will consider "feasible alternative methods" for raising an additional 1-2% of RWA in loss-absorbing capacity, in consultation with industry and other interested stakeholders
(3) APRA's proposed revisions to 'unquestionably strong' framework (released December 2020) not reflected
(4) Capital surplus of 2.5% is generally higher than the normal level for D-SIBS, as a result of the 'unquestionably strong' capital benchmarks
(5) Excludes any Pillar 2 requirements and additional loss-absorbing capacity 1-2% RWA requirement through "feasible alternative methods"
91 (6) CCB is the Capital Conservation Buffer
National
Australia
BankView entire presentation