1H24 Financial Results

Capital - regulatory changes Basel III reforms in Australia finalised and a number of regulatory changes in progress Change Revision to Capital Framework (including Operational Risk) ADI Liquidity and Capital Standards Market Risk Implementation APS 110, 111, 112, 113, 115 (Implemented) Minor amendments to APS 112, 113 (30 Jun 2024) APS 330 (1 Jan 2025) APS 210 and APS111 (1 Jan 2025) APS 117 (1 Oct 2025) APS 116 (2026) Details • Implemented on 1 Jan 2023 with the aim to increase the risk sensitivity within the capital framework, enhance the ability of ADIs to respond flexibly to future stress events, and improve the comparability with international standards. • • Minimum CET1 Capital ratio of 10.25% for IRB ADIS such as CBA, including a baseline countercyclical capital buffer (CCyB) of 1% which may be varied by APRA in the range of 0%-3.50% and releasable in times of systemic stress and post-stress recovery. Revised APS 330 on public disclosure requirements which aligns with both APRA's new capital framework and the Basel Committee's internationally agreed minimum requirements effective from 1 Jan 2025, replacing the existing transitional APS 330. APRA further consulted on minor amendments impacting APS 112 and APS 113 to address specific implementation issues raised by the industry, which are expected to have an immaterial impact for CBA with a number of the revisions already implemented. • Targeted revisions to ensure ADIs have strong crisis preparedness, prudently value their liquid assets and minimise potential contagion risks. • 1 Jan 2024 and • Loss Absorbing Capital (LAC) RBNZ Capital Review 1 Jan 2026 Phased implementation from Oct 2021 to 1 Jul 2028 Additional Tier 1 Capital Discussion paper released on 21 Sep 23 with formal consultation in 2024 • APRA commenced consultation on 15 Nov 2023 and intends to finalise the consultation in the first half of 2024. • Non-traded: Updated draft APS 117 released by APRA on 12 Dec 2023 in response to the Nov 2022 consultation, which aims to standardise aspects of the calculation of IRRBB capital to reduce volatility over time and variations between ADIs. APRA intends to finalise the consultation by mid-2024 ahead of implementation on 1 October 2025. • • • • • Traded: APRA is yet to commence consultation on Fundamental Review of the Trading Book. Increase of 3% to Total Capital on 1 Jan 2024, and a further 1.5% to 4.5% by 1 Jan 2026. Can be met via any form of capital (CET1, Tier 1 or Tier 2). • By the end of the transition period, the minimum Tier 1 and Total capital requirements for Domestic-Systemically Important Banks (D-SIBS), including ASB, will increase to 16% and 18% of RWA respectively, of which 13.5% must be in the form of CET1 capital. Tier 2 capital can contribute up to a maximum of 2% of the Total capital requirement. Considers the effectiveness of AT1 Capital as a 'going concern' instrument to stabilise a bank in stress, and support an orderly resolution to avoid the use of public money and safeguard depositor funds. • The discussion paper outlines a number of potential options centred around 3 key themes, being the design, role and participation in AT1. • Response to discussion paper submitted on 15 Nov 2023 and APRA expects to undertake a formal consultation process in CY2024. 128

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