Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

ASB restates capital ratios after miscalculation

ASB restates capital ratios after miscalculation puts it out of compliance

By Paul McBeth

Nov. 28 (BusinessDesk) - ASB Bank, the local arm of Commonwealth Bank of Australia, has restated its reported capital ratios after a miscalculation meant it fell short of compliance for the better part of a year.

In September, the Auckland-based lender discovered it overstated its capital ratios for the September 2016, December 2016, March 2017 and June 2017 periods, which it has since addressed in its latest disclosure statement. ASB said it applied an incorrect definition of surplus common equity tier one capital in the calculations, which breached a condition of registration.

On finding the mistake, the bank hired a professional services firm to review its compliance and other instances of historic non-compliance including two incorrect provisions and expected loss adjustments in its capital adequacy calculation, areas where internal risk management calculations were carried through to market risk capital calculations, and other minor technical mistakes.

"These calculation errors have now been corrected for the three months ended 30 September 2017," ASB said in its latest disclosure statement. "These errors did not cause the bank to breach any of its required minimum capital ratios, or breach the minimum buffer ratio requirements of condition of registration 1C", which outlines the steps the bank has to take if its capital buffer gets too low.

Banks' compliance has come under greater scrutiny this month after Westpac Banking Corp's New Zealand unit was censured by the Reserve Bank for a long-running breach of its obligations by using unapproved internal models, and forced to lift its minimum capital requirements. The central bank's six-monthly gauge on the health of New Zealand's financial sector is due for release tomorrow.

ASB's total capital ratio of 13.8 percent as at Sept. 30 was well above the 8 percent minimum, while its buffer ratio was 5.7 percent compared to a 2.5 percent minimum.

In its March quarterly disclosure statement, ASB noted it miscalculated its risk-weighted exposures for some non-retail facilities since March 2008, which overstated its capital ratios, while in the June statement the bank said it hired a firm to independently validate its capital ratio calculations, which found two minor issues that didn't affect the previously reported ratios.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: Body massages and Uber are in, DVDs are out, says Stats NZ

Statistics New Zealand has rejigged the consumers price index basket in its latest three-year review, adding body massages, Airbnb and Uber and removing DVD and Blu-Ray players…More>>

ALSO:


StuffMe: Commerce Commission Welcomes Dismissal Of Merger Appeal

In a summary of their judgment released today, Justice Dobson and lay member Professor Martin Richardson dismissed the appellants’ process criticisms and found the Commission was entitled to place significant weight on the prospect of reduced quality of the products produced by the merged entity. More>>

ALSO:

Digital Futures: New Chief Technology Officer Role Created

Communications Minister Clare Curran has called for expressions of interest for the new role of Chief Technology Officer position to help drive a forward-looking digital agenda for New Zealand. More>>

Real Estate: NZ house sales slump in December but prices still firm

The number of property sales across New Zealand slumped 10 percent in December from a year earlier but prices continued to lift, according to the Real Estate Institute. More >>

ALSO:


Dry: Beef + Lamb Launches Drought Resources

The resources include a fact sheet outlining strategies to manage and mitigate the effects of drought, coping with stress on the farm and advice on feed requirements and animal welfare during the dry period. More>>

ALSO:

InternetNZ: Net Neutrality Failure In US "Will Hurt All Users"

InternetNZ Chief Executive Jordan Carter has condemned the decision by the United States communications regulator to undo 2015 open Internet rules, warning that all Internet users will end up worse off as a result. More>>

ALSO: