APRA releases new 'unquestionably strong' capital benchmarks

The Australian Prudential Regulation Authority (APRA) has today released an Information Paper which outlines APRA’s assessment of the additional capital required for the Australian banking sector to have capital ratios that are considered 'unquestionably strong'.  The Information Paper provides details of the quantum and timing of capital increases that will be required for Australian ADIs to achieve unquestionably strong capital ratios.

For Bendigo and Adelaide Bank Limited (BEN) and other standardised ADIs, APRA has concluded that an increase to the minimum CET1 capital requirements of approximately 50 basis points would be required to produce capital standards for standardised ADIs that are consistent with the concept of 'unquestionably strong'.  APRA’s expectation is for ADIs to meet these new capital benchmarks by no later than 2020.

Subject to further details yet to be released by APRA, Bendigo and Adelaide Bank confirms that it is well positioned to meet these new capital requirements in the ordinary course of business before the 2020 timeline.