Dividend and interest payments on Tier 1Dividend and interest payments on Tier 1 and Upper Tier 2 capital instruments

Dividend and interest payments on Tier 1 and Upper Tier 2 capital instruments

30. Unless otherwise approved in writing by APRA:

(a) the aggregate amount of dividend payments on ordinary shares must not exceed, at Level 1 and Level 2, an ADI’s after-tax earnings after taking into account any payments on more senior capital instruments, in the financial year to which they relate; and

(b) the aggregate amount of dividend or interest payments, whether whole or partial, paid on Upper Tier 2 capital and Residual Tier 1 capital must not exceed, at Level 1 and Level 2, an ADI’s after-tax earnings after taking into account any payments made on more senior capital instruments, calculated before any such payments are applied in the financial year to which they relate.

For these purposes, ‘financial year’ means a period of 12 consecutive months covered by one or more sets of publicly available operating results preceding the date of the proposed payment of dividend or interest. For example, where an ADI makes available half-yearly operating results, a financial year will refer to the preceding two publicly available half-yearly operating results for the ADI.