Financial Performance and Remediation Update
LIQUIDITY CONSIDERATIONS
•
INCREASED SYSTEM LIQUIDITY
Central bank policies continue to increase system liquidity and
deposit growth. TFF has been fully drawn ($17.6bn in FY21 for NAB),
with NAB managing maturity concentration over FY23-24
CLF to be phased out to zero by end of 2022 (currently at $31bn).
Implications for NAB include:
• Increased wholesale funding issuance
•
Higher physical liquids from replacement of CLF to impact
margins as more low yielding assets are added to the balance
sheet
• Reduced CLF cost due to removal of 20bps fee by end of 2022
offset by cost of additional funding required for liquid assets
UNWINDING THE LIQUIDITY INJECTION BY THE RBA3
Bond purchases
expected to cease in
AUSTRALIAN CORE FUNDING GAP1
($bn)
260
240
220
200
180
160
140
120
APRA
Methodology
Change²
Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 Mar 21 Sep 21
Peer 3
-NAB
Peer 1
Peer 2
SYSTEM EXCHANGE SETTLEMENT ACCOUNT (ESA) BALANCES4
($bn)
($bn)
600
500
400
300
200
100
0
Mar-20
February 2022
Mar-22
Mar-24
400
TFF matures by
June 2024
350
300
250
Wind down of current
bond purchase program
200
Policy response to
COVID-19 commenced
Mar-20
150
100
50
Mar-26
Mar-28
Mar-30
Mar-32
0
Mar 19
Sep 19
RBA bond
purchasing
commences
Final
drawdowns
of the TFF
Continuation
of QE
Australian Government Securities ■Semi-Government Securities ■TFF
Mar 20
Sep 20
Mar 21
Sep 21
(1) Australian core funding gap = Gross loans and advances plus Acceptances less Total deposits (excluding financial institution deposits and certificates of deposit)
(2) APRA Monthly Banking Statistics are used from September 2017 to March 2019. April 2019 onwards is prepared using APRA Monthly Authorised Deposit-taking Institution Statistics. Statistics as at
September 2021
(3) RBA unconventional monetary policies from March 2020, including TFF, bonds purchased to address market dysfunction, Yield Curve Control or Quantitative Easing (QE). Also includes forecast bond
purchases at a rate of $4bn per week to February 2022
94 (4) ESAs are the means by which providers of payments services settle obligations that have accrued in the clearing process, operated through the Reserve Bank Information and Transfer System (RITS)
Effective 4 November 2020, the interest rate on surplus ESA balances set by the RBA is 0.00%. RBA data
National
Australia
BankView entire presentation