Westpac New Zealand Economic and Sustainability Strategy Update
Capital position
WNZL regulatory capital ratios (%)
Capital adequacy ratios (RBNZ basis)
■CET1
■ AT1 ■Tier 2
Current
Regulatory
Minimum
Mar-21
18.2
Common Equity Tier 1 (CET1) Capital
7.0%
13.4%
17.1
(incl. Capital Conservation Buffer (CCB))
2.0
15.9
15.9
2.1
Tier One Capital (incl. CCB)
8.5%
16.2%
2.0
1.8
2.8
2.7
Total Regulatory Capital (incl. CCB)
Buffer
10.5%
18.2%
2.5%
8.9%
2.6
2.7
13.4
12.3
11.3
11.4
Sep-19
Mar-20
Sep-20
Mar-21
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RBNZ regulatory capital proposals
Increasing total capital requirements from 10.5% of risk weighted assets (RWA) to 18% for
systemically important banks
Setting a Tier 1 capital requirement of 16% of RWA for systemically important banks
Additional Tier 1 capital ('AT1') can comprise no more than 2.5% of the 16% Tier 1 capital
requirement
Eligible Tier 1 capital will comprise common equity and redeemable perpetual preference
shares. Existing AT1 instruments will be phased out over a seven-year period
Maintaining the existing Tier 2 capital requirement of 2% of RWA
Recalibrating RWA for internal ratings-based banks, such that aggregate RWA will increase
to approximately 90% of standardised RWA
The RBNZ has delayed the start of the proposed changes to 1 July 2022 and banks will be
given up to 7 years to comply
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