Australian Housing Dynamics and Affordability
AUSTRALIA'S TLAC REGIME
APRA'S TLAC REQUIREMENTS
APRA has announced that it will require Australian D-SIB's to
meet TLAC requirements by an increase in Total Capital of
3% of RWA by Jan 2024
Its overall targeted calibration of an additional 4%-5% of RWA
to meet TLAC remains unchanged, so over the next four years
they will consider "feasible alternative methods" for raising an
additional 1% to 2% of RWA
Regulatory Minimum
Including Buffers 17%
Additional 3%
(~AUD12b) of Tier 2
capital by 1 Jan 2024
14.0%
T2
12.0%
AT1
10.5%
CET1 Buffer
8.0%
CCB1
4.5%
CET1
Minimum
ANZ'S TOTAL REGULATORY CAPITAL
2.1%
Based on ANZ's RWA of AUD417b as at 30 September 2019, the
additional 3% equates to an incremental increase of
approximately ~AUD12b of Tier 2 capital
1.9%
T2
(~AUD8.5b)
AT1
(~AUD7.9b)
This will result in an estimated Total Capital ratio, on an
internationally harmonised basis of ~25% well in excess of the
FSB TLAC minimum of 21.5% (18% plus Capital Conservation
Buffer (CCB) of 3.5%)
11.4%
CET1
(~AUD47.4b)
Tier 2 capital outstanding as at 30 September 2019 is ~AUD8.5b
(2.1% of Level 2 RWA)
Total Tier 2 requirement (including refinancing) by January 2024
is AUD21b (5.0% of Level 2 RWA)
Current
Regulatory Total
Capital
Minimum
14% includes
"Unquestionably
Strong" CET1 of
10.5%
5.0%
(~AUD21b)
AUD12b
increase
(3% of RWA)
30 September 2019
1 January 2024
1.
APRA may set higher minimum capital requirements for individual ADIs. A counter-cyclical buffer of up to 2.5% may also be required, which APRA has currently set for Australia at 0%.
ANZ
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