The Australian Prudential Regulation Authority (APRA) has finalized its requirements for loss-absorbing capacity. APRA announced that domestic systemically important banks (D-SIBs), including ANZ, must increase their Total Capital by an additional 1.5% of risk-weighted assets (RWA) by January 2026. This new requirement is in addition to the previously announced interim increase of 3%, resulting in a total minimum Total Capital requirement increase of 4.5% of RWA.
ANZ has indicated it plans to meet this additional requirement through Tier 2 Capital. The final amount required will be determined based on ANZ’s actual RWA as of January 2026, factoring in the revisions to APRA’s capital framework announced on November 29, 2021.
APRA commented, “Given changes to RWA from the ADI capital reforms, the lower end of the range in dollar terms broadly equates to a requirement of 4.5 percentage points of RWA under the new capital framework, in place from 2023.”
More information about APRA's announcement is available on its website at apra.gov.au. Further details on ANZ's Tier 2 Capital profile as of September 30, 2021, can be found on page 85 of the ANZ Full Year Results Investor Discussion Pack available at anz.com/shareholder/centre/reporting/results-announcement/.