Australian Housing Dynamics and Affordability
REGULATORY CAPITAL
CAPITAL UPDATE
APRA Level 2 CET1 ratio of 11.4% (16.4% on an Internationally Comparable basis¹),
which is in excess of APRA's 'unquestionably strong' benchmark².
APRA Level 1 CET1 ratio of 11.4%. Level 1 consolidation primarily comprises ANZ BGL
(the Parent including offshore branches) but excludes offshore banking subsidiaries³.
APRA Leverage ratio of 5.6% (or 6.2% on an Internationally Comparable basis).
Asset divestments contributed ~$2b in 2H19 (mainly divestment of OPL Australia)
Pro-forma adjusted CET1 ratio of ~11.5%, including benefits from P&I divestment
(~20bps), partially offset by IFRS16 impacts (~-7bps)
Organic Capital Generation
Net organic capital generation of 75bps for 2H19 - in line with historical averages of
~80bps (excluding Institutional rebalancing)
Capital Outlook - Regulatory Development
"
APRA LEVEL 2 COMMON EQUITY TIER 1 (CET1)
%
Net Organic Capital
Generation +75bps
0.83
0.02
0.52
11.44
11.49
11.36
-0.10
-0.56
-0.51 -0.13
-0.20
Sep-18 Mar-19 Cash
NPAT Business Deduc-
growth tions5
RWA Capital Dividends Asset Net Reme- Other Sep-19
Divest Imposts diation
ments
RBNZ capital proposal - Potential impact of NZ$6b to NZ$8b for ANZ NZ (from Sep-18).
Final impact depends on the outcome of the RBNZ consultation.
LEVEL 2 BASEL III CET1
APRA loss absorbing capacity (TLAC) - Total Capital requirements increased by 3% of
RWA (~$12b in Tier 2 based on Sep-19 position) by January 2024.
%
16.8
Revisions to treatment of equity investments in subsidiaries - in the absence of any
offsetting management actions, this implies a reduction in ANZ's Level 1 CET1 capital
ratio of up to approximately $2.5b (75bps). However, ANZ believes that this outcome is
unlikely and, post implementation of management actions, the net capital impact could
be minimal.
Other ongoing APRA regulatory reviews potentially impacting the future capital position
include: Revisions to capital framework (RWA), Unquestionably Strong capital calibration,
and the Transparency, Comparability and Flexibility proposals.
11.4
11.5
Sep-18
Mar-19
APRA
Internationally Comparable¹
16.9
11.4
Sep-19
16.4
1. Internationally Comparable methodology aligns with APRA's information paper entitled International Capital Comparison Study (13 July 2015). Basel III Internationally Comparable ratios do not
include an estimate of the Basel I capital floor 2. Based on APRA information paper "Strengthening banking system resilience - establishing unquestionably strong capital ratios" released in July
2017 3. Refer to ANZ Basel III APS330 Pillar 3 disclosures 4. Cash NPAT excludes 'Large/notable' items' and one-off items 5. Mainly comprises the movement in retained earnings in
deconsolidated entities and capitalised software 6. Includes SA-CCR (-18bps); APRA Operational Risk overlay (-18bps); and RWA floors for NZ housing/farm exposures (-18bps) 7. Other impacts
include movements in non-cash earnings and net foreign currency translation
ANZ
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