Banking (prudential standard) determination No. 2 of 2025
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Leases
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Lease exposures include all lease and asset finance exposures, irrespective of the counterparty type, and include exposures generated by the leasing of right-of-use assets. For lease exposures, excluding residual value risk, an ADI must apply the risk weight of the counterparty, as specified in this Attachment.
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Where an ADI is exposed to residual value risk, such as when it acts as the lessor in operating leases, it must measure the aggregate residual value and apply the risk weights in Table 15 to the residual value of its leased assets.
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Risk weights for residual value under lease exposures
| Risk weight (%) applying to the portion of aggregate residual value ≤ 10% of Tier 1 capital | Risk weight (%) applying to the portion of aggregate residual value > 10% of Tier 1 capital | |
|---|---|---|
| Exposures to residual value | 100 | 250 |