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Reporting Standard ARS 110.0

Capital Adequacy

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all authorised deposit-taking institutions that are locally-incorporated to report to APRA, generally on a quarterly basis, in relation to their capital adequacy.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with:

• the versions of Form ARF 110.0 Capital Adequacy designated for a ‘Licensed ADI’ and ‘Consolidated Group’, and the associated instructions (all of which are attached and form part of this reporting standard); and
• Prudential Standard APS 110 Capital Adequacy and associated guidance notes and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital.

Purpose

1. Data collected in Form ARF 110.0 Capital Adequacy (ARF 110.0) is used by APRA for the purpose of prudential supervision, including assessing compliance with Prudential Standard APS 110 Capital Adequacy and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital. It may also be used by the Reserve Bank of Australia and the Australian Bureau of Statistics.

Application

2. This reporting standard applies to all locally-incorporated authorised deposit-taking institutions (ADIs).

Information required

3. A locally-incorporated ADI must provide APRA with the information required by the version of Form ARF 110.0 designated for a ‘Licensed ADI’ for each reporting period.

4. A locally-incorporated ADI that is a highest parent entity in relation to a consolidated ADI group must also provide APRA with the information required by the version of Form ARF 110.0 designated for a ‘Consolidated Group’ for each reporting period.

Forms and method of submission

5. The information required by this reporting standard must be given to APRA either:

(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or

(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.

Note: the Direct to APRA application software and paper forms may be obtained from APRA.

Reporting periods and due dates

6. Subject to paragraph 7, a locally-incorporated ADI must provide the information required by this reporting standard for each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the ADI.

7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular ADI, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:

(a) the particular circumstances of the ADI;

(b) the extent to which the information is required for the purposes of the prudential supervision of the ADI; and

(c) the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics.

8. The information required by this reporting standard must be provided to APRA by the following times:

(a) in the case of information required by paragraphs 3 and 4 from a locally-incorporated bank or locally-incorporated special service provider – 20 business days after the end of the reporting period to which the information relates; and

(b) in the case of information required by paragraphs 3 and 4 from a locally incorporated credit union, locally-incorporated building society, locally-incorporated specialist credit card institution or Cairns Penny Savings & Loans Limited – 15 business days after the end of the reporting period to which the information relates.

9. APRA may grant an ADI an extension of a due date in writing, in which case the new due date for the provision of the information will be the date on the notice of extension.

Quality control

10. The information provided by an ADI under this reporting standard (except for the information required under paragraph 4) must be the product of processes and controls that have been reviewed and tested by the external auditor of the ADI. AGS 1008 ‘Audit Implications of Prudential Reporting Requirements for Authorised Deposit-taking Institutions’, issued by the Auditing and Assurance Standards Board provides guidance on the scope and nature of the review and testing required from external auditors. This review and testing must be done on an annual basis or more frequently if necessary to enable the external auditor to form an opinion on the accuracy and reliability of the data.

11. All information provided by an ADI under this reporting standard must be subject to processes and controls developed by the ADI for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the ADI to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.

Authorisation

12. If an ADI submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the ADI to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the ADI who have authority from the ADI to transmit the data to APRA.

13. If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:

(a) the Principal Executive Officer of the ADI; or

(b) the Chief Financial Officer of the ADI (whatever his or her official title may be).

Minor alterations to forms and instructions

14. APRA may make minor variations to:

(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or

(b) the instructions to a form, to clarify their application to the form

without changing any substantive requirement in the form or instructions.

15. If APRA makes such a variation it must notify in writing each ADI that is required to report under this reporting standard.

Transitional

16. An ADI must report under the old reporting standard in respect of a transitional reporting period. For these purposes:

old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).

transitional reporting period means a reporting period under the old reporting standard:

(a) which ended before the date of revocation of the old reporting standard; and

(b) in relation to which the ADI was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.

Interpretation - classifications of ADIs

17. In this reporting standard:

Accounting Standard AASB 127 means the accounting standard so made by the Australian Accounting Standards Board.

ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.

ADI list means the attached ADI list.

building society means an ADI whose name appears under the heading ‘Building Societies’ in the ADI list.

consolidated ADI group means a group comprising:

(a) an ADI that is a highest parent entity; and

(b) each subsidiary (within the meaning of Accounting Standard AASB 127) of that ADI, whether the subsidiary is locally-incorporated or not, other than a subsidiary that is excluded by the instructions attached to this standard.

credit union means an ADI whose name appears under the heading ‘Credit Unions’ in the ADI list.

highest parent entity means an ADI that satisfies all of the following conditions:

(a) it is locally-incorporated;

(b) it has at least one subsidiary (within the meaning of Accounting Standard AASB 127); and

(c) it is not itself a subsidiary (within the meaning of Accounting Standard AASB 127) of an ADI that is locally-incorporated.

locally-incorporated means, subject to paragraph 18, incorporated in Australia.

locally-incorporated bank means, subject to paragraph 18, an ADI whose name appears under the heading ‘Australian-owned Banks’ or ‘Foreign Subsidiary Banks’ in the ADI list.

special service provider means an ADI whose name appears under the heading ‘Other ADIs’ in the ADI list (other than Cairns Penny Savings & Loans Limited).

specialist credit card institution means an ADI whose name appears under the heading ‘Specialist Credit Card Institutions (SCCIs)’ in the ADI list.

18. For the purposes of this reporting standard, Bank of China is taken to be a locally-incorporated ADI and a locally-incorporated bank.

19. If an ADI is not in the ADI list, then:

(a) if the ADI assumes or uses the word ‘bank’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated bank for the purposes of this reporting standard;

(b) if the ADI assumes or uses the expression ‘building society’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated building society for the purposes of this reporting standard;

(c) if the ADI assumes or uses the expression ‘credit union’, ‘credit society’ or ‘credit co-operative’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated credit union for the purposes of this reporting standard; and

(d) if the ADI engages in credit card issuing or credit card acquiring, or both, and does not otherwise carry on banking business within the meaning of section 5 of the Banking Act 1959, and is locally-incorporated, it is taken to be a locally-incorporated specialist credit card institution for the purposes of this reporting standard.

20. APRA may in writing determine that an ADI is taken to be a locally-incorporated bank, locally-incorporated building society, locally-incorporated credit union, locally-incorporated special service provider or locally-incorporated specialist credit card institution for the purposes of this reporting standard (even if, under paragraph 17, 18 or 19, it comes within a different classification).

Interpretation - other definitions

21. In this reporting standard:

business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.

Principal Executive Officer means the principal executive officer of the ADI for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity.

reporting period means a reporting period under paragraph 6 or, if applicable, paragraph 7.

The ADI list

Australian-owned Banks

• Adelaide Bank Limited
• AMP Bank Limited
• Australia and New Zealand Banking Group Limited
• Bank of Queensland Limited
• Bendigo Bank Limited
• Commonwealth Bank of Australia
• Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
• Elders Rural Bank Limited
• Macquarie Bank Limited
• Members Equity Bank Pty Limited
• National Australia Bank Limited
• St George Bank Limited
• Suncorp-Metway Limited
• Westpac Banking Corporation

Foreign Subsidiary Banks

• Arab Bank Australia Limited
• Bank of China (Australia) Limited
• Bank of Cyprus Australia Pty Limited
• BankWest (the trading name of Bank of Western Australia Limited, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
• Citigroup Pty Limited
• HSBC Bank Australia Limited
• ING Bank (Australia) Limited
• Investec Bank (Australia) Limited
• Laiki Bank (Australia) Limited
• NM Rothschild & Sons (Australia) Limited
• Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)

Branches of Foreign Banks

• ABN AMRO Bank N.V.
• Bank of America, National Association
• Bank of China (subject to depositor protection provisions of the Banking Act 1959)
• Bank of Tokyo-Mitsubishi UFJ, Ltd
• Barclays Capital (the trading name of Barclays Bank plc)
• BNP Paribas
• Citibank N.A.
• Credit Suisse
• Deutsche Bank AG
• HBOS Treasury Services plc
• HSBC Bank plc
• ING Bank NV
• JPMorgan Chase Bank, National Association
• Mizuho Corporate Bank, Ltd
• Oversea-Chinese Banking Corporation Limited
• Rabobank Nederland (the trading name of Co-operative Central Raiffeisen-Boerenleenbank B.A.)
• Royal Bank of Canada
• Société Générale
• Standard Chartered Bank
• State Bank of India
• State Street Bank and Trust Company
• The International Commercial Bank of China
• The Royal Bank of Scotland Plc
• The Toronto-Dominion Bank
• Taiwan Business Bank
• UBS AG
• United Overseas Bank Limited
• WestLB AG

Building Societies

• ABS Building Society Ltd
• B & E Ltd
• Greater Building Society Ltd
• Heritage Building Society Limited
• Home Building Society Ltd
• Hume Building Society Ltd
• IMB Ltd
• Lifeplan Australia Building Society Limited
• Mackay Permanent Building Society Ltd
• Maitland Mutual Building Society Limited
• Newcastle Permanent Building Society Ltd
• Pioneer Permanent Building Society Limited
• The Rock Building Society Limited
• Wide Bay Australia Ltd

Credit Unions

• Alliance One Credit Union Ltd
• AMP Employees' & Agents Credit Union Limited
• Austral Credit Union Limited
• Australian Central Credit Union Limited
• Australian Country Credit Union Ltd (trading as Reliance Credit Union)
• Australian Defence Credit Union Ltd
• AWA Credit Union Limited
• Bananacoast Community Credit Union Ltd
• Bankstown City Credit Union Ltd
• Berrima District Credit Union Ltd
• Big Sky Credit Union Ltd
• Blue Mountains and Riverlands Community Credit Union Ltd
• Broadway Credit Union Ltd
• Calare Credit Union Ltd
• CAPE Credit Union Limited
• Capital Credit Union Ltd
• Capricornia Credit Union Ltd
• Carboy (SA) Credit Union Limited
• Central Murray Credit Union Limited
• Central West Credit Union Limited
• Circle Credit Co-operative Limited
• Coastline Credit Union Limited
• Collie Miners Credit Union Ltd
• Community Alliance Credit Union Limited
• Community CPS Australia Limited
• Community First Credit Union Limited
• Companion Credit Union Limited
• Comtax Credit Union Limited
• Connect Credit Union of Tasmania Limited
• Country First Credit Union Ltd
• CPS Credit Union Co-operative (ACT) Limited
• Credit Union Australia Ltd
• Credit Union Incitec Pivot Limited
• Croatian Community Credit Union Limited
• CSR and Rinker Employees Credit Union Limited
• Dairy Farmers Credit Union Ltd
• Defence Force Credit Union Limited
• Discovery Credit Union Ltd
• Dnister Ukrainian Credit Co-operative Limited
• ELCOM Credit Union Ltd
• Electricity Credit Union Ltd
• Encompass Credit Union Limited
• Ericsson Employees Credit Co-operative Limited
• Esso Employees' Credit Union Ltd
• Eurobodalla Credit Union Ltd
• Family First Credit Union Limited
• Fire Brigades Employees' Credit Union Limited
• Fire Service Credit Union Limited
• Firefighters & Affiliates Credit Co-operative Limited
• First Option Credit Union Limited
• First Pacific Credit Union Limited
• Fitzroy & Carlton Community Credit Co-operative Limited
• Ford Co-operative Credit Society Limited
• Gateway Credit Union Ltd
• Geelong & District Credit Co-operative Society Limited
• GMH (Employees) Q.W.L. Credit Co-operative Limited
• Goldfields Credit Union Ltd
• Gosford City Credit Union Ltd
• Goulburn Murray Credit Union Co-operative Limited
• H.M.C. Staff Credit Union Ltd
• Heritage Isle Credit Union Limited
• Hibernian Credit Union Limited
• Holiday Coast Credit Union Ltd
• Horizon Credit Union Ltd
• Hoverla Ukrainian Credit Co-operative Ltd
• Hunter Mutual Limited
• Hunter United Employees' Credit Union Limited
• Industries Mutual Credit Union Limited
• Intech Credit Union Limited
• Island State Credit Union Ltd
• Karpaty Ukrainian Credit Union Limited
• La Trobe Country Credit Co-operative Limited
• La Trobe University Credit Union Co-operative Limited
• Laboratories Credit Union Ltd
• Latvian Australian Credit Co-operative Society Limited
• Lithuanian Co-operative Society (Talka) Limited
• Lysaght Credit Union Ltd
• MacArthur Credit Union Ltd
• Macaulay Community Credit Co-operative Limited
• Macquarie Credit Union Limited
• Maleny and District Community Credit Union Limited
• Manly Warringah Credit Union Ltd
• Maritime Workers of Australia Credit Union Ltd
• Maroondah Credit Union Ltd
• MECU Limited
• Melbourne University Credit Union Limited
• Memberfirst Credit Union Limited
• New England Credit Union Ltd
• Newcom Colliery Employees' Credit Union Ltd
• Northern Inland Credit Union Ltd
• Nova Credit Union Limited
• NSW Teachers Credit Union Ltd
• Old Gold Credit Union Co-operative Limited
• Orana Credit Union Ltd
• Orange Credit Union Limited
• Phoenix (NSW) Credit Union Ltd
• Plenty Credit Co-operative Limited
• Police & Nurses Credit Society Limited
• Police Association Credit Co-operative Limited
• Police Credit Union Limited
• Polish Community Credit Union Ltd
• Power Credit Union Limited
• Powerstate Credit Union Ltd
• Pulse Credit Union Limited
• Qantas Staff Credit Union Limited
• Queensland Community Credit Union Limited
• Queensland Country Credit Union Ltd
• Queensland Police Credit Union Limited
• Queensland Professional Credit Union Ltd
• Queensland Teachers' Credit Union Limited
• Queenslanders Credit Union Limited
• Railways Credit Union Limited
• RegionalOne Credit Union Limited
• Resources Credit Union Limited
• RTA Staff Credit Union Limited
• Satisfac Direct Credit Union Limited
• Savings and Loans Credit Union (S.A.) Ltd
• Security Credit Union Ltd
• Select Credit Union Ltd
• Service One Credit Union Ltd
• SGE Credit Union Limited
• Shell Employees' Credit Union Limited
• South West Slopes Credit Union Ltd
• Southern Cross Credit Union Limited
• South-West Credit Union Co-operative Limited
• St Mary's Swan Hill Co-operative Credit Society Limited
• St Patrick's Mentone Co-operative Credit Society Limited
• Statewest Credit Society Limited
• Sutherland Credit Union Ltd
• Sutherland Shire Council Employees' Credit Union Ltd
• Sydney Credit Union Ltd
• Tartan Credit Union Ltd
• The Broken Hill Community Credit Union Ltd
• The Gympie Credit Union Ltd
• The Police Department Employees' Credit Union Limited
• The Summerland Credit Union Limited
• The TAFE and Community Credit Union Limited
• The University Credit Society Limited
• Traditional Credit Union Limited
• TransComm Credit Co-operative Limited
• Uni Credit Union Ltd
• United Credit Union Limited
• Victoria Teachers Credit Union Limited
• Wagga Mutual Credit Union Ltd
• Warwick Credit Union Ltd
• WAW Credit Union Co-operative Limited
• Westax Credit Society Ltd
• Western City Credit Union Ltd
• Woolworths/Safeway Employees' Credit Co-operative Limited
• Wyong Council Credit Union Ltd
• Yennora Credit Union Ltd

Specialist Credit Card Institutions (SCCIs)

Foreign-owned SCCIs

• GE Capital Finance Australia
• GE Finance Australasia Pty Ltd

Locally Incorporated SCCIs

• MoneySwitch Limited

Other ADIs

These companies are run by industry bodies and provide services (eg payments clearing) to member building societies and credit unions.

• Australian Settlements Limited
• Credit Union Services Corporation (Australia) Limited
• Indue Ltd

One ADI that provides general banking services which does not fall into the other categories.

• Cairns Penny Savings & Loans Limited

Authorised Non-Operating Holding Companies

• HBOS Australia Pty Ltd

Capital Adequacy

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all authorised deposit-taking institutions that are locally-incorporated to report to APRA, generally on a quarterly basis, in relation to their capital adequacy.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with:

• the versions of Form ARF 110.0 Capital Adequacy designated for a ‘Licensed ADI’ and ‘Consolidated Group’, and the associated instructions (all of which are attached and form part of this reporting standard); and
• Prudential Standard APS 110 Capital Adequacy and associated guidance notes and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital.

Purpose

1. Data collected in Form ARF 110.0 Capital Adequacy (ARF 110.0) is used by APRA for the purpose of prudential supervision, including assessing compliance with Prudential Standard APS 110 Capital Adequacy and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital. It may also be used by the Reserve Bank of Australia and the Australian Bureau of Statistics.

Application

2. This reporting standard applies to all locally-incorporated authorised deposit-taking institutions (ADIs).

Information required

3. A locally-incorporated ADI must provide APRA with the information required by the version of Form ARF 110.0 designated for a ‘Licensed ADI’ for each reporting period.

4. A locally-incorporated ADI that is a highest parent entity in relation to a consolidated ADI group must also provide APRA with the information required by the version of Form ARF 110.0 designated for a ‘Consolidated Group’ for each reporting period.

Forms and method of submission

5. The information required by this reporting standard must be given to APRA either:

(a) in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or

(b) manually completed on paper, which must be faxed or mailed to APRA’s head office.

Note: the Direct to APRA application software and paper forms may be obtained from APRA.

Reporting periods and due dates

6. Subject to paragraph 7, a locally-incorporated ADI must provide the information required by this reporting standard for each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the ADI.

7. APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular ADI, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:

(a) the particular circumstances of the ADI;

(b) the extent to which the information is required for the purposes of the prudential supervision of the ADI; and

(c) the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics.

8. The information required by this reporting standard must be provided to APRA by the following times:

(a) in the case of information required by paragraphs 3 and 4 from a locally-incorporated bank or locally-incorporated special service provider – 20 business days after the end of the reporting period to which the information relates; and

(b) in the case of information required by paragraphs 3 and 4 from a locally incorporated credit union, locally-incorporated building society, locally-incorporated specialist credit card institution or Cairns Penny Savings & Loans Limited – 15 business days after the end of the reporting period to which the information relates.

9. APRA may grant an ADI an extension of a due date in writing, in which case the new due date for the provision of the information will be the date on the notice of extension.

Quality control

10. The information provided by an ADI under this reporting standard (except for the information required under paragraph 4) must be the product of processes and controls that have been reviewed and tested by the external auditor of the ADI. AGS 1008 ‘Audit Implications of Prudential Reporting Requirements for Authorised Deposit-taking Institutions’, issued by the Auditing and Assurance Standards Board provides guidance on the scope and nature of the review and testing required from external auditors. This review and testing must be done on an annual basis or more frequently if necessary to enable the external auditor to form an opinion on the accuracy and reliability of the data.

11. All information provided by an ADI under this reporting standard must be subject to processes and controls developed by the ADI for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the ADI to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.

Authorisation

12. If an ADI submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the ADI to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the ADI who have authority from the ADI to transmit the data to APRA.

13. If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:

(a) the Principal Executive Officer of the ADI; or

(b) the Chief Financial Officer of the ADI (whatever his or her official title may be).

Minor alterations to forms and instructions

14. APRA may make minor variations to:

(a) a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or

(b) the instructions to a form, to clarify their application to the form

without changing any substantive requirement in the form or instructions.

15. If APRA makes such a variation it must notify in writing each ADI that is required to report under this reporting standard.

Transitional

16. An ADI must report under the old reporting standard in respect of a transitional reporting period. For these purposes:

old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).

transitional reporting period means a reporting period under the old reporting standard:

(a) which ended before the date of revocation of the old reporting standard; and

(b) in relation to which the ADI was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.

Interpretation - classifications of ADIs

17. In this reporting standard:

Accounting Standard AASB 127 means the accounting standard so made by the Australian Accounting Standards Board.

ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.

ADI list means the attached ADI list.

building society means an ADI whose name appears under the heading ‘Building Societies’ in the ADI list.

consolidated ADI group means a group comprising:

(a) an ADI that is a highest parent entity; and

(b) each subsidiary (within the meaning of Accounting Standard AASB 127) of that ADI, whether the subsidiary is locally-incorporated or not, other than a subsidiary that is excluded by the instructions attached to this standard.

credit union means an ADI whose name appears under the heading ‘Credit Unions’ in the ADI list.

highest parent entity means an ADI that satisfies all of the following conditions:

(a) it is locally-incorporated;

(b) it has at least one subsidiary (within the meaning of Accounting Standard AASB 127); and

(c) it is not itself a subsidiary (within the meaning of Accounting Standard AASB 127) of an ADI that is locally-incorporated.

locally-incorporated means, subject to paragraph 18, incorporated in Australia.

locally-incorporated bank means, subject to paragraph 18, an ADI whose name appears under the heading ‘Australian-owned Banks’ or ‘Foreign Subsidiary Banks’ in the ADI list.

special service provider means an ADI whose name appears under the heading ‘Other ADIs’ in the ADI list (other than Cairns Penny Savings & Loans Limited).

specialist credit card institution means an ADI whose name appears under the heading ‘Specialist Credit Card Institutions (SCCIs)’ in the ADI list.

18. For the purposes of this reporting standard, Bank of China is taken to be a locally-incorporated ADI and a locally-incorporated bank.

19. If an ADI is not in the ADI list, then:

(a) if the ADI assumes or uses the word ‘bank’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated bank for the purposes of this reporting standard;

(b) if the ADI assumes or uses the expression ‘building society’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated building society for the purposes of this reporting standard;

(c) if the ADI assumes or uses the expression ‘credit union’, ‘credit society’ or ‘credit co-operative’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated credit union for the purposes of this reporting standard; and

(d) if the ADI engages in credit card issuing or credit card acquiring, or both, and does not otherwise carry on banking business within the meaning of section 5 of the Banking Act 1959, and is locally-incorporated, it is taken to be a locally-incorporated specialist credit card institution for the purposes of this reporting standard.

20. APRA may in writing determine that an ADI is taken to be a locally-incorporated bank, locally-incorporated building society, locally-incorporated credit union, locally-incorporated special service provider or locally-incorporated specialist credit card institution for the purposes of this reporting standard (even if, under paragraph 17, 18 or 19, it comes within a different classification).

Interpretation - other definitions

21. In this reporting standard:

business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.

Principal Executive Officer means the principal executive officer of the ADI for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity.

reporting period means a reporting period under paragraph 6 or, if applicable, paragraph 7.

The ADI list

Australian-owned Banks

• Adelaide Bank Limited
• AMP Bank Limited
• Australia and New Zealand Banking Group Limited
• Bank of Queensland Limited
• Bendigo Bank Limited
• Commonwealth Bank of Australia
• Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
• Elders Rural Bank Limited
• Macquarie Bank Limited
• Members Equity Bank Pty Limited
• National Australia Bank Limited
• St George Bank Limited
• Suncorp-Metway Limited
• Westpac Banking Corporation

Foreign Subsidiary Banks

• Arab Bank Australia Limited
• Bank of China (Australia) Limited
• Bank of Cyprus Australia Pty Limited
• BankWest (the trading name of Bank of Western Australia Limited, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
• Citigroup Pty Limited
• HSBC Bank Australia Limited
• ING Bank (Australia) Limited
• Investec Bank (Australia) Limited
• Laiki Bank (Australia) Limited
• NM Rothschild & Sons (Australia) Limited
• Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)

Branches of Foreign Banks

• ABN AMRO Bank N.V.
• Bank of America, National Association
• Bank of China (subject to depositor protection provisions of the Banking Act 1959)
• Bank of Tokyo-Mitsubishi UFJ, Ltd
• Barclays Capital (the trading name of Barclays Bank plc)
• BNP Paribas
• Citibank N.A.
• Credit Suisse
• Deutsche Bank AG
• HBOS Treasury Services plc
• HSBC Bank plc
• ING Bank NV
• JPMorgan Chase Bank, National Association
• Mizuho Corporate Bank, Ltd
• Oversea-Chinese Banking Corporation Limited
• Rabobank Nederland (the trading name of Co-operative Central Raiffeisen-Boerenleenbank B.A.)
• Royal Bank of Canada
• Société Générale
• Standard Chartered Bank
• State Bank of India
• State Street Bank and Trust Company
• The International Commercial Bank of China
• The Royal Bank of Scotland Plc
• The Toronto-Dominion Bank
• Taiwan Business Bank
• UBS AG
• United Overseas Bank Limited
• WestLB AG

Building Societies

• ABS Building Society Ltd
• B & E Ltd
• Greater Building Society Ltd
• Heritage Building Society Limited
• Home Building Society Ltd
• Hume Building Society Ltd
• IMB Ltd
• Lifeplan Australia Building Society Limited
• Mackay Permanent Building Society Ltd
• Maitland Mutual Building Society Limited
• Newcastle Permanent Building Society Ltd
• Pioneer Permanent Building Society Limited
• The Rock Building Society Limited
• Wide Bay Australia Ltd

Credit Unions

• Alliance One Credit Union Ltd
• AMP Employees' & Agents Credit Union Limited
• Austral Credit Union Limited
• Australian Central Credit Union Limited
• Australian Country Credit Union Ltd (trading as Reliance Credit Union)
• Australian Defence Credit Union Ltd
• AWA Credit Union Limited
• Bananacoast Community Credit Union Ltd
• Bankstown City Credit Union Ltd
• Berrima District Credit Union Ltd
• Big Sky Credit Union Ltd
• Blue Mountains and Riverlands Community Credit Union Ltd
• Broadway Credit Union Ltd
• Calare Credit Union Ltd
• CAPE Credit Union Limited
• Capital Credit Union Ltd
• Capricornia Credit Union Ltd
• Carboy (SA) Credit Union Limited
• Central Murray Credit Union Limited
• Central West Credit Union Limited
• Circle Credit Co-operative Limited
• Coastline Credit Union Limited
• Collie Miners Credit Union Ltd
• Community Alliance Credit Union Limited
• Community CPS Australia Limited
• Community First Credit Union Limited
• Companion Credit Union Limited
• Comtax Credit Union Limited
• Connect Credit Union of Tasmania Limited
• Country First Credit Union Ltd
• CPS Credit Union Co-operative (ACT) Limited
• Credit Union Australia Ltd
• Credit Union Incitec Pivot Limited
• Croatian Community Credit Union Limited
• CSR and Rinker Employees Credit Union Limited
• Dairy Farmers Credit Union Ltd
• Defence Force Credit Union Limited
• Discovery Credit Union Ltd
• Dnister Ukrainian Credit Co-operative Limited
• ELCOM Credit Union Ltd
• Electricity Credit Union Ltd
• Encompass Credit Union Limited
• Ericsson Employees Credit Co-operative Limited
• Esso Employees' Credit Union Ltd
• Eurobodalla Credit Union Ltd
• Family First Credit Union Limited
• Fire Brigades Employees' Credit Union Limited
• Fire Service Credit Union Limited
• Firefighters & Affiliates Credit Co-operative Limited
• First Option Credit Union Limited
• First Pacific Credit Union Limited
• Fitzroy & Carlton Community Credit Co-operative Limited
• Ford Co-operative Credit Society Limited
• Gateway Credit Union Ltd
• Geelong & District Credit Co-operative Society Limited
• GMH (Employees) Q.W.L. Credit Co-operative Limited
• Goldfields Credit Union Ltd
• Gosford City Credit Union Ltd
• Goulburn Murray Credit Union Co-operative Limited
• H.M.C. Staff Credit Union Ltd
• Heritage Isle Credit Union Limited
• Hibernian Credit Union Limited
• Holiday Coast Credit Union Ltd
• Horizon Credit Union Ltd
• Hoverla Ukrainian Credit Co-operative Ltd
• Hunter Mutual Limited
• Hunter United Employees' Credit Union Limited
• Industries Mutual Credit Union Limited
• Intech Credit Union Limited
• Island State Credit Union Ltd
• Karpaty Ukrainian Credit Union Limited
• La Trobe Country Credit Co-operative Limited
• La Trobe University Credit Union Co-operative Limited
• Laboratories Credit Union Ltd
• Latvian Australian Credit Co-operative Society Limited
• Lithuanian Co-operative Society (Talka) Limited
• Lysaght Credit Union Ltd
• MacArthur Credit Union Ltd
• Macaulay Community Credit Co-operative Limited
• Macquarie Credit Union Limited
• Maleny and District Community Credit Union Limited
• Manly Warringah Credit Union Ltd
• Maritime Workers of Australia Credit Union Ltd
• Maroondah Credit Union Ltd
• MECU Limited
• Melbourne University Credit Union Limited
• Memberfirst Credit Union Limited
• New England Credit Union Ltd
• Newcom Colliery Employees' Credit Union Ltd
• Northern Inland Credit Union Ltd
• Nova Credit Union Limited
• NSW Teachers Credit Union Ltd
• Old Gold Credit Union Co-operative Limited
• Orana Credit Union Ltd
• Orange Credit Union Limited
• Phoenix (NSW) Credit Union Ltd
• Plenty Credit Co-operative Limited
• Police & Nurses Credit Society Limited
• Police Association Credit Co-operative Limited
• Police Credit Union Limited
• Polish Community Credit Union Ltd
• Power Credit Union Limited
• Powerstate Credit Union Ltd
• Pulse Credit Union Limited
• Qantas Staff Credit Union Limited
• Queensland Community Credit Union Limited
• Queensland Country Credit Union Ltd
• Queensland Police Credit Union Limited
• Queensland Professional Credit Union Ltd
• Queensland Teachers' Credit Union Limited
• Queenslanders Credit Union Limited
• Railways Credit Union Limited
• RegionalOne Credit Union Limited
• Resources Credit Union Limited
• RTA Staff Credit Union Limited
• Satisfac Direct Credit Union Limited
• Savings and Loans Credit Union (S.A.) Ltd
• Security Credit Union Ltd
• Select Credit Union Ltd
• Service One Credit Union Ltd
• SGE Credit Union Limited
• Shell Employees' Credit Union Limited
• South West Slopes Credit Union Ltd
• Southern Cross Credit Union Limited
• South-West Credit Union Co-operative Limited
• St Mary's Swan Hill Co-operative Credit Society Limited
• St Patrick's Mentone Co-operative Credit Society Limited
• Statewest Credit Society Limited
• Sutherland Credit Union Ltd
• Sutherland Shire Council Employees' Credit Union Ltd
• Sydney Credit Union Ltd
• Tartan Credit Union Ltd
• The Broken Hill Community Credit Union Ltd
• The Gympie Credit Union Ltd
• The Police Department Employees' Credit Union Limited
• The Summerland Credit Union Limited
• The TAFE and Community Credit Union Limited
• The University Credit Society Limited
• Traditional Credit Union Limited
• TransComm Credit Co-operative Limited
• Uni Credit Union Ltd
• United Credit Union Limited
• Victoria Teachers Credit Union Limited
• Wagga Mutual Credit Union Ltd
• Warwick Credit Union Ltd
• WAW Credit Union Co-operative Limited
• Westax Credit Society Ltd
• Western City Credit Union Ltd
• Woolworths/Safeway Employees' Credit Co-operative Limited
• Wyong Council Credit Union Ltd
• Yennora Credit Union Ltd

Specialist Credit Card Institutions (SCCIs)

Foreign-owned SCCIs

• GE Capital Finance Australia
• GE Finance Australasia Pty Ltd

Locally Incorporated SCCIs

• MoneySwitch Limited

Other ADIs

These companies are run by industry bodies and provide services (eg payments clearing) to member building societies and credit unions.

• Australian Settlements Limited
• Credit Union Services Corporation (Australia) Limited
• Indue Ltd

One ADI that provides general banking services which does not fall into the other categories.

• Cairns Penny Savings & Loans Limited

Authorised Non-Operating Holding Companies

• HBOS Australia Pty Ltd

Objective of this reporting standard

This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all authorised deposit-taking institutions that are locally-incorporated to report to APRA, generally on a quarterly basis, in relation to their capital adequacy.

This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with:

• the versions of Form ARF 110.0 Capital Adequacy designated for a ‘Licensed ADI’ and ‘Consolidated Group’, and the associated instructions (all of which are attached and form part of this reporting standard); and
• Prudential Standard APS 110 Capital Adequacy and associated guidance notes and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital.

Transitional

16. An ADI must report under the old reporting standard in respect of a transitional reporting period. For these purposes:

old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).

transitional reporting period means a reporting period under the old reporting standard:

(a) which ended before the date of revocation of the old reporting standard; and

(b) in relation to which the ADI was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.

Interpretation - classifications of ADIs

17. In this reporting standard:

Accounting Standard AASB 127 means the accounting standard so made by the Australian Accounting Standards Board.

ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.

ADI list means the attached ADI list.

building society means an ADI whose name appears under the heading ‘Building Societies’ in the ADI list.

consolidated ADI group means a group comprising:

(a) an ADI that is a highest parent entity; and

(b) each subsidiary (within the meaning of Accounting Standard AASB 127) of that ADI, whether the subsidiary is locally-incorporated or not, other than a subsidiary that is excluded by the instructions attached to this standard.

credit union means an ADI whose name appears under the heading ‘Credit Unions’ in the ADI list.

highest parent entity means an ADI that satisfies all of the following conditions:

(a) it is locally-incorporated;

(b) it has at least one subsidiary (within the meaning of Accounting Standard AASB 127); and

(c) it is not itself a subsidiary (within the meaning of Accounting Standard AASB 127) of an ADI that is locally-incorporated.

locally-incorporated means, subject to paragraph 18, incorporated in Australia.

locally-incorporated bank means, subject to paragraph 18, an ADI whose name appears under the heading ‘Australian-owned Banks’ or ‘Foreign Subsidiary Banks’ in the ADI list.

special service provider means an ADI whose name appears under the heading ‘Other ADIs’ in the ADI list (other than Cairns Penny Savings & Loans Limited).

specialist credit card institution means an ADI whose name appears under the heading ‘Specialist Credit Card Institutions (SCCIs)’ in the ADI list.

18. For the purposes of this reporting standard, Bank of China is taken to be a locally-incorporated ADI and a locally-incorporated bank.

19. If an ADI is not in the ADI list, then:

(a) if the ADI assumes or uses the word ‘bank’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated bank for the purposes of this reporting standard;

(b) if the ADI assumes or uses the expression ‘building society’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated building society for the purposes of this reporting standard;

(c) if the ADI assumes or uses the expression ‘credit union’, ‘credit society’ or ‘credit co-operative’ in relation to its financial business, and it is locally-incorporated, it is taken to be a locally-incorporated credit union for the purposes of this reporting standard; and

(d) if the ADI engages in credit card issuing or credit card acquiring, or both, and does not otherwise carry on banking business within the meaning of section 5 of the Banking Act 1959, and is locally-incorporated, it is taken to be a locally-incorporated specialist credit card institution for the purposes of this reporting standard.

20. APRA may in writing determine that an ADI is taken to be a locally-incorporated bank, locally-incorporated building society, locally-incorporated credit union, locally-incorporated special service provider or locally-incorporated specialist credit card institution for the purposes of this reporting standard (even if, under paragraph 17, 18 or 19, it comes within a different classification).

Interpretation - other definitions

21. In this reporting standard:

business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.

Principal Executive Officer means the principal executive officer of the ADI for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity.

reporting period means a reporting period under paragraph 6 or, if applicable, paragraph 7.

The ADI list

Australian-owned Banks

• Adelaide Bank Limited
• AMP Bank Limited
• Australia and New Zealand Banking Group Limited
• Bank of Queensland Limited
• Bendigo Bank Limited
• Commonwealth Bank of Australia
• Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
• Elders Rural Bank Limited
• Macquarie Bank Limited
• Members Equity Bank Pty Limited
• National Australia Bank Limited
• St George Bank Limited
• Suncorp-Metway Limited
• Westpac Banking Corporation

Foreign Subsidiary Banks

• Arab Bank Australia Limited
• Bank of China (Australia) Limited
• Bank of Cyprus Australia Pty Limited
• BankWest (the trading name of Bank of Western Australia Limited, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
• Citigroup Pty Limited
• HSBC Bank Australia Limited
• ING Bank (Australia) Limited
• Investec Bank (Australia) Limited
• Laiki Bank (Australia) Limited
• NM Rothschild & Sons (Australia) Limited
• Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)

Branches of Foreign Banks

• ABN AMRO Bank N.V.
• Bank of America, National Association
• Bank of China (subject to depositor protection provisions of the Banking Act 1959)
• Bank of Tokyo-Mitsubishi UFJ, Ltd
• Barclays Capital (the trading name of Barclays Bank plc)
• BNP Paribas
• Citibank N.A.
• Credit Suisse
• Deutsche Bank AG
• HBOS Treasury Services plc
• HSBC Bank plc
• ING Bank NV
• JPMorgan Chase Bank, National Association
• Mizuho Corporate Bank, Ltd
• Oversea-Chinese Banking Corporation Limited
• Rabobank Nederland (the trading name of Co-operative Central Raiffeisen-Boerenleenbank B.A.)
• Royal Bank of Canada
• Société Générale
• Standard Chartered Bank
• State Bank of India
• State Street Bank and Trust Company
• The International Commercial Bank of China
• The Royal Bank of Scotland Plc
• The Toronto-Dominion Bank
• Taiwan Business Bank
• UBS AG
• United Overseas Bank Limited
• WestLB AG

Building Societies

• ABS Building Society Ltd
• B & E Ltd
• Greater Building Society Ltd
• Heritage Building Society Limited
• Home Building Society Ltd
• Hume Building Society Ltd
• IMB Ltd
• Lifeplan Australia Building Society Limited
• Mackay Permanent Building Society Ltd
• Maitland Mutual Building Society Limited
• Newcastle Permanent Building Society Ltd
• Pioneer Permanent Building Society Limited
• The Rock Building Society Limited
• Wide Bay Australia Ltd

Credit Unions

• Alliance One Credit Union Ltd
• AMP Employees' & Agents Credit Union Limited
• Austral Credit Union Limited
• Australian Central Credit Union Limited
• Australian Country Credit Union Ltd (trading as Reliance Credit Union)
• Australian Defence Credit Union Ltd
• AWA Credit Union Limited
• Bananacoast Community Credit Union Ltd
• Bankstown City Credit Union Ltd
• Berrima District Credit Union Ltd
• Big Sky Credit Union Ltd
• Blue Mountains and Riverlands Community Credit Union Ltd
• Broadway Credit Union Ltd
• Calare Credit Union Ltd
• CAPE Credit Union Limited
• Capital Credit Union Ltd
• Capricornia Credit Union Ltd
• Carboy (SA) Credit Union Limited
• Central Murray Credit Union Limited
• Central West Credit Union Limited
• Circle Credit Co-operative Limited
• Coastline Credit Union Limited
• Collie Miners Credit Union Ltd
• Community Alliance Credit Union Limited
• Community CPS Australia Limited
• Community First Credit Union Limited
• Companion Credit Union Limited
• Comtax Credit Union Limited
• Connect Credit Union of Tasmania Limited
• Country First Credit Union Ltd
• CPS Credit Union Co-operative (ACT) Limited
• Credit Union Australia Ltd
• Credit Union Incitec Pivot Limited
• Croatian Community Credit Union Limited
• CSR and Rinker Employees Credit Union Limited
• Dairy Farmers Credit Union Ltd
• Defence Force Credit Union Limited
• Discovery Credit Union Ltd
• Dnister Ukrainian Credit Co-operative Limited
• ELCOM Credit Union Ltd
• Electricity Credit Union Ltd
• Encompass Credit Union Limited
• Ericsson Employees Credit Co-operative Limited
• Esso Employees' Credit Union Ltd
• Eurobodalla Credit Union Ltd
• Family First Credit Union Limited
• Fire Brigades Employees' Credit Union Limited
• Fire Service Credit Union Limited
• Firefighters & Affiliates Credit Co-operative Limited
• First Option Credit Union Limited
• First Pacific Credit Union Limited
• Fitzroy & Carlton Community Credit Co-operative Limited
• Ford Co-operative Credit Society Limited
• Gateway Credit Union Ltd
• Geelong & District Credit Co-operative Society Limited
• GMH (Employees) Q.W.L. Credit Co-operative Limited
• Goldfields Credit Union Ltd
• Gosford City Credit Union Ltd
• Goulburn Murray Credit Union Co-operative Limited
• H.M.C. Staff Credit Union Ltd
• Heritage Isle Credit Union Limited
• Hibernian Credit Union Limited
• Holiday Coast Credit Union Ltd
• Horizon Credit Union Ltd
• Hoverla Ukrainian Credit Co-operative Ltd
• Hunter Mutual Limited
• Hunter United Employees' Credit Union Limited
• Industries Mutual Credit Union Limited
• Intech Credit Union Limited
• Island State Credit Union Ltd
• Karpaty Ukrainian Credit Union Limited
• La Trobe Country Credit Co-operative Limited
• La Trobe University Credit Union Co-operative Limited
• Laboratories Credit Union Ltd
• Latvian Australian Credit Co-operative Society Limited
• Lithuanian Co-operative Society (Talka) Limited
• Lysaght Credit Union Ltd
• MacArthur Credit Union Ltd
• Macaulay Community Credit Co-operative Limited
• Macquarie Credit Union Limited
• Maleny and District Community Credit Union Limited
• Manly Warringah Credit Union Ltd
• Maritime Workers of Australia Credit Union Ltd
• Maroondah Credit Union Ltd
• MECU Limited
• Melbourne University Credit Union Limited
• Memberfirst Credit Union Limited
• New England Credit Union Ltd
• Newcom Colliery Employees' Credit Union Ltd
• Northern Inland Credit Union Ltd
• Nova Credit Union Limited
• NSW Teachers Credit Union Ltd
• Old Gold Credit Union Co-operative Limited
• Orana Credit Union Ltd
• Orange Credit Union Limited
• Phoenix (NSW) Credit Union Ltd
• Plenty Credit Co-operative Limited
• Police & Nurses Credit Society Limited
• Police Association Credit Co-operative Limited
• Police Credit Union Limited
• Polish Community Credit Union Ltd
• Power Credit Union Limited
• Powerstate Credit Union Ltd
• Pulse Credit Union Limited
• Qantas Staff Credit Union Limited
• Queensland Community Credit Union Limited
• Queensland Country Credit Union Ltd
• Queensland Police Credit Union Limited
• Queensland Professional Credit Union Ltd
• Queensland Teachers' Credit Union Limited
• Queenslanders Credit Union Limited
• Railways Credit Union Limited
• RegionalOne Credit Union Limited
• Resources Credit Union Limited
• RTA Staff Credit Union Limited
• Satisfac Direct Credit Union Limited
• Savings and Loans Credit Union (S.A.) Ltd
• Security Credit Union Ltd
• Select Credit Union Ltd
• Service One Credit Union Ltd
• SGE Credit Union Limited
• Shell Employees' Credit Union Limited
• South West Slopes Credit Union Ltd
• Southern Cross Credit Union Limited
• South-West Credit Union Co-operative Limited
• St Mary's Swan Hill Co-operative Credit Society Limited
• St Patrick's Mentone Co-operative Credit Society Limited
• Statewest Credit Society Limited
• Sutherland Credit Union Ltd
• Sutherland Shire Council Employees' Credit Union Ltd
• Sydney Credit Union Ltd
• Tartan Credit Union Ltd
• The Broken Hill Community Credit Union Ltd
• The Gympie Credit Union Ltd
• The Police Department Employees' Credit Union Limited
• The Summerland Credit Union Limited
• The TAFE and Community Credit Union Limited
• The University Credit Society Limited
• Traditional Credit Union Limited
• TransComm Credit Co-operative Limited
• Uni Credit Union Ltd
• United Credit Union Limited
• Victoria Teachers Credit Union Limited
• Wagga Mutual Credit Union Ltd
• Warwick Credit Union Ltd
• WAW Credit Union Co-operative Limited
• Westax Credit Society Ltd
• Western City Credit Union Ltd
• Woolworths/Safeway Employees' Credit Co-operative Limited
• Wyong Council Credit Union Ltd
• Yennora Credit Union Ltd

Specialist Credit Card Institutions (SCCIs)

Foreign-owned SCCIs

• GE Capital Finance Australia
• GE Finance Australasia Pty Ltd

Locally Incorporated SCCIs

• MoneySwitch Limited

Other ADIs

These companies are run by industry bodies and provide services (eg payments clearing) to member building societies and credit unions.

• Australian Settlements Limited
• Credit Union Services Corporation (Australia) Limited
• Indue Ltd

One ADI that provides general banking services which does not fall into the other categories.

• Cairns Penny Savings & Loans Limited

Authorised Non-Operating Holding Companies

• HBOS Australia Pty Ltd

Instruction Guide

This form sets out the calculation of an authorised deposit-taking institution’s (ADI’s) regulatory capital and associated capital ratios at the stand-alone and consolidated banking group level. In completing this form, ADIs should refer to Prudential Standard APS 110 Capital Adequacy (APS 110) and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111) and their accompanying Guidance Notes.

General directions and notes

Reporting entity

This form is to be completed by all locally incorporated ADIs (including Specialist Credit Card Institutions (SCCIs)) on both a licensed ADI and consolidated ADI group basis (where applicable). Foreign ADIs[1] and SCCIs operating through branches in Australia are not required to complete this form.

Licensed ADI

Refers to the reporting ADI at Level 1 (i.e. the stand-alone level) defined in accordance with APS 110.

Consolidated ADI group

Refers to the consolidated group of the reporting ADI at Level 2 (i.e. the consolidated banking group level) defined in accordance with APS 110.

The basis of consolidation required in this form is in accordance with the prudential consolidated ADI group. The prudential consolidated ADI group should be determined in accordance with Australian accounting standards, notably AASB 127 Consolidated and Separate Financial Statements and AASB 3 Business Combinations (AASB 3) with the following modifications:

(1) Include the following:

• all controlled banking entities, securities entities and other financial entities (e.g. finance companies, money market corporations, stockbrokers and leasing companies).

(2) Exclude controlled entities involved in the following business activities:

• insurance businesses (including friendly societies and health funds);
• acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds management or the securitisation of assets; and
• non-financial (commercial) operations; and
• special purpose vehicles (SPVs) to which assets have been transferred in accordance with APRA’s clean sale requirements set down in Guidance Note AGN 120.3 Purchase and Supply of Assets (AGN 120.3) regardless of whether they are consolidated for accounting purposes (refer Securitisation Deconsolidation Principle below).

Securitisation deconsolidation principle

(Applicable to licensed and consolidated ADI group).

Except where stated otherwise on this form, reporting entities must treat any securitisation program SPVs in which the ADI (or a member of its consolidated banking group) participates in accordance with APRA’s clean sale and separation requirements as non-consolidated independent third parties. As a result, for reporting purposes all assets, liabilities, revenues and expenses of these SPVs must be excluded from the ADI’s reported amounts. Where relevant, report on this form any exposure to or other transaction between the ADI and any such SPV as if such transaction was conducted with an independent third party, regardless of whether the SPV or its assets is consolidated for accounting purposes.

APRA’s clean sale and separation requirements are set out in APS 120 Funds Management and Securitisation (APS 120) and related Guidance Notes AGN 120.3 and AGN 120.1 Disclosure and Separation. Whenever the clean sale and separation requirements are not met, all the assets, liabilities, revenues and expenses of the SPV are to be consolidated with the ADI’s reported amounts.

Note: ADIs should consult APRA in case of doubt as to whether a subsidiary or controlled entity that engaged in non-financial operations should be consolidated at Level 2 for capital adequacy purposes.

Reporting period

The form is to be completed as at the last day of the stated reporting quarter. Locally incorporated banks and other ADIs (including Special Service Providers (SSPs)) should submit the completed form to APRA within 20 business days after the end of the relevant reporting quarter. Credit Unions, Cairns Penny Savings & Loans Limited, Building Societies and SCCIs should submit the completed form to APRA within 15 business days after the end of the relevant reporting quarter.

Unit of measurement

Banks are asked to complete the form in millions of Australian dollars rounded to one decimal place. Other ADIs (including SSPs), Building Societies, Credit Unions, SCCIs and Cairns Penny Savings & Loans Limited are asked to complete the form in whole Australian dollars (no decimal place).

Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).

Specific instructions

The following instructions are applicable to both the Licensed ADI form and the Consolidated Group form where relevant.

Section A: Level 1/Level 2 capital base

1. Tier 1 capital

1.1 Fundamental Tier 1 capital

Includes paid-up ordinary share capital, general reserves (excluding any General Reserve for Credit Losses), capital profits reserve, foreign currency translation reserve, retained earnings, current year’s earnings net of expected dividends, tax expenses and upfront fee income (refer APS 111) and minority interests.

1.1.1 Paid-up ordinary share capital[2]

Include only the proceeds of the issue that have been received by the issuer. Any partly paid issue is eligible only to the extent that it has been paid up.

1.1.2 General reserves

General reserves are created from the appropriation of profits and share premium by an ADI (or the group it heads) after the payment of all dividends and tax. These may include:

(a) reserves representing the offset to a charge to profit and loss of the ADI arising from equity-settled share-based payments (i.e. shares and or share options) granted to employees as part of their remuneration package (including any shares or share options granted to employees by way of bonus arrangements associated with their employment, and shares or share options granted to employees of an acquired institution in return for continued services). This is provided that:

(i) the shares or share options granted relate only to the ordinary shares of the ADI itself; and

(ii) there are no circumstances in which such remuneration (including bonuses) can be realised, in part or full, other than by way of the issue of ordinary shares of the ADI – i.e. there is no right for remuneration to be converted to a payment in another form (e.g. cash).

Any other reserves associated with share-based payments (refer Australian accounting standards AASB 2 Share-based Payment) should be excluded from both Tier 1 and Tier 2 capital; and

(b) cumulative unrealised gains or losses on hedges[3] offsetting gains or losses on reserves included in Tier 1 capital (e.g. movements in the currency value of foreign currency denominated hedging instruments which offset movements in foreign currency denominated items recognised in the foreign currency translation reserve).

Do not include in this item General Reserve for Credit Losses.

1.1.3 Capital profits reserve

Include realised gains on the disposal of revalued assets that have not been transferred from the asset revaluation reserve (ARR) to retained earnings.

1.1.4 Foreign currency translation reserve

Include the exchange rate differences arising on translation of assets and liabilities in accordance with AASB 121.

1.1.5 Retained earnings

Include the amount of retained earnings.

1.1.6 Current year’s earnings net of expected dividends and tax expenses

Report current year’s profits (or losses) after taking account of:

(a) negative goodwill;

(b) the unwinding of any discount on credit loss provisions;

(c) the proceeds from any dividend reinvestment plan pending the issuance of ordinary shares, as agreed with APRA; and

(d) expected dividends and tax expenses.

Current year earnings also include the full value of upfront fee income (e.g., application and loan fees) provided that:

(a) the fee income has either been received in cash or has been debited to a customer’s account or otherwise forms part of the upfront fees owed by a customer;

(b) outstanding amounts of fee income debited to customer accounts must be able to be claimed in full in the event of default by the customer, or capable of being sold as part of outstanding debts to a third party;

(c) the provider of the income has no recourse for repayment in part or full of any prepaid income;

(d) the customer is not able to cancel any fees debited to the customer’s account for which they were otherwise obliged to pay upfront; and

(e) there is no requirement for the provision of continuing additional services or products associated with the fee income concerned.

1.1.7 Minority interests (Level 2)

Include any minority interests in Tier 1 capital of subsidiaries on consolidation at Level 2.

1.1.8 Total Fundamental Tier 1 capital (Level 2) or 1.1.7 total Fundamental Tier 1 capital (Level 1)

The sum of the Fundamental Tier 1 capital items 1.1.1-1.1.6 for Level 1 or 1.1.1-1.1.7 for Level 2.

1.2 Residual Tier 1 capital

1.2.1 Non-innovative Residual Tier 1 capital instruments

Includes capital instruments that satisfy the relevant criteria set out in AGN 111.1 Tier 1 Capital at Level 1 or Level 2. Any amount in excess of the limit set out in APS 111 is reported as Upper Tier 2 capital, item 3.1.8. (refer APS 111).

1.2.2 Innovative Tier 1 capital instruments

Includes capital instruments that satisfy the relevant criteria set out in AGN 111.1 Tier 1 capital. Any amount in excess of the limit set out in APS 111 is reported as Upper Tier 2 capital, item 3.1.8. (See APS 111).

1.2.3 Total Residual Tier 1 capital

The sum of Non-innovative Residual Tier 1 and Innovative Tier 1 capital instruments (items 1.2.1 – 1.2.2.) Any amount in excess of the limit set out in APS 111 is reported as Upper Tier 2 capital, item 3.1.8. (refer APS 111).

1.3 Gross Tier 1 capital

The sum of Fundamental Tier 1 capital and Residual Tier 1 capital.

2. Deductions from Tier 1 capital

Items required to be deducted from gross Tier 1 capital in accordance with APS 111.

2.1 Goodwill (Level 2)

Deduct goodwill (net of impairment) from Tier 1 capital at Level 2. Goodwill (determined in accordance with AASB 3) represents the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

2.2 Intangible component of investments in non-consolidated subsidiaries and other non-Level 2 entities (Level 2) or 2.2 Intangible component of investments in subsidiaries and other entities (Level 1)

This item includes intangible component of investments arising on an acquisition (net of impairment) (Refer AGN 111.4 Capital Deductions (AGN 111.4) and any changes in the intangible component of investments in subsidiaries and other entities (e.g. any excess of the reported market value of an interest in a subsidiary over the net amount of the subsidiary’s assets and liabilities, based on the subsidiary’s consolidated financial reports), that arises after or outside of acquisitions at Level 1 and Level 2 (refer APS 111).

2.3 Capitalised expenses

Refer to AGN 111.4 effective for required treatment of specific items below.

Detail separately:

2.3.1 Loan and lease origination fees and commissions paid to mortgage originators and brokers;

2.3.2 Securitisation establishment costs;

2.3.3 Costs associated with debt raisings/funding; and

2.3.4 Other capitalised expenses of a general nature

e.g. strategic business development initiatives.

2.4 Any other intangible assets not included above

Deduct any other intangible assets (net of adjustments to profit and loss reflecting amortisation and impairment)[4] not included above.

2.5 Deferred tax assets (DTA)

The amount of DTA (other than those amounts associated with “collective provisions” incorporated in “General Reserve for Credit Losses”) to be deducted from Tier 1 capital at Level 1 and Level 2 should be net of deferred tax liabilities (DTL) (except for DTL relating to defined-benefit superannuation plan surplus. See item 2.9. for an example). Where the DTL exceeds the amount of DTA, the deduction reported for this item is zero. (Refer AGN 111.)

2.6 Holdings of own Tier 1 capital instruments and any unused trading limit agreed with APRA

Refer to AGN 111.4.

2.7 Equity and other capital investments in non-consolidated captive lenders mortgage insurers (Level 2) or 2.7 equity and other capital investments in associated lenders mortgage insurers (Level 1)

Deduct all equity and other capital investments in captive lenders mortgage insurers at Level 1/Level 2 (These entities are not consolidated for capital adequacy purposes – see Guidance Note AGN 110.2 Non-consolidated Subsidiaries).

2.8 Equity investments in non-subsidiary entities exceeding prescribed limits

Deduct all equity investments in non-subsidiary entities at Level 1/Level 2 that are not operating in the field of finance, in excess of 0.25% of the ADI’s Level 2 gross Tier 1 capital for an individual investment or 5% of the ADI’s Level 2 gross Tier 1 capital in aggregate.

2.9 Surplus in any ADI-sponsored defined benefit superannuation plan

Report in item 2.9. the defined benefit superannuation plan surplus net of the DTL. For example:

Defined benefit surplus $100

Related DTL (30% tax rate) $ 30

Net impact on gross Tier 1 capital $ 70 Report in item 2.9.

Also remove the above DTL impact from item 2.5.

Surpluses and deficits may not be netted across employer-sponsored defined benefit superannuation plans (refer AGN 111.4).

2.10 Deficit in any ADI-sponsored defined benefit superannuation plan not already reflected in Tier 1 capital

If there are any gross aggregate deficits on individual plans, these should be deducted to the extent not already reflected in gross Tier 1 capital at Level 1 / Level 2. Surpluses and deficits may not be netted across employer-sponsored defined benefit superannuation plans (refer AGN 111.4). For example:

Defined benefit deficit $100

Related DTA (30% tax rate) $ 30 Report in item 2.5

Net impact on gross Tier 1 capital $ 70 Report in item 2.10 if not already reflected in gross Tier 1 capital

DTA relating to defined benefit superannuation plan deficit will be reported as part of item 2.5 as a Tier 1 capital deduction.

2.11 Net unrealised fair value gains/(losses) from changes in the ADI’s own creditworthiness

Deduct/(add back) any unrealised fair value gains/(losses) included in gross Tier 1 capital arising from changes in the reporting ADI’s own creditworthiness (e.g. reduction in fair value of the ADI’s outstanding debt due to change in credit rating) at Level 1/Level 2.

2.12 Net unrealised gains/(losses) on effective cash flow hedges

Deduct any cumulative unrealised gains/(losses) on effective cash flow hedges reflected in retained earnings or reserves included in Tier 1 capital which do not offset gains or losses on reserves included in Tier 1 capital at Level 1/Level 2.

2.13 Other Tier 1 capital deductions as advised by APRA

Include any other Tier 1 capital deductions (refer APS 111), such as:

Revaluation movements of assets not held for trading purposes and passed through profit and loss

Deduct any revaluation of assets (including investment property) not held for trading purposes and passed through the profit and loss unless the revaluations are specifically permitted to be included in Tier 1 capital for the purposes of APS 111.

Amounts relating to General Reserve for Credit Losses not already charged against retained earnings

Deduct any amounts relating to the General Reserve for Credit Losses (net of any associated DTA) which have not already been charged against retained earnings.

Net fair value gains/(losses) relating to illiquid instruments

Deduct any fair value gains and add back any fair value losses relating to illiquid instruments[5] that are not eligible for inclusion in Tier 1 capital in accordance with APS 111 at Level 1/Level 2.

Net fair value gains/(losses) relating to loans and receivables

Deduct any fair value gains and add back any fair value losses relating to loans and receivables that are not eligible for inclusion in Tier 1 capital in accordance with APS 111 at Level 1/Level 2.

Portion of current year earnings or retained earnings which represents the ADI’s share of undistributed profit or loss of an associate/joint venture

Deduct any portion of current year earnings or retained earnings which represents any amount deriving from the ADI’s share of undistributed profit or loss in an associate/joint venture, under equity accounting. This amount should be included in Upper Tier 2 capital item 3.1.2.

Any negative movement over the amount of the respective revaluation reserves to the extent not already accounted for in current year earnings or retained earnings

If there is a deficit in the respective ARR that is:

(a) a result of negative movements; and

(b) not already accounted for in current year earnings or retained earnings;

deduct the deficit from Tier 1 capital.

Any impairment of an asset to the extent not already taken into account in profit and loss

For assets that do not have a corresponding ARR in Upper Tier 2 capital, deduct any impairment to the extent not already taken into account in profit and loss.

Any amounts included in revaluation reserves that would otherwise have been included in Tier 1 capital

Deduct any amounts included in revaluation reserves in Upper Tier 2 capital that would otherwise be included in Tier 1 capital.

Others

Any other deductions as advised by APRA.

2.14 Reduce amount of deductions by:

2.14.1 Other adjustments approved by APRA

Include any additions to Tier 1 capital or reduction in deductions that have been approved by APRA, including transition amounts affecting Tier 1 capital at Level 1/Level 2.

2.15 Total deductions from Tier 1 capital

Sum of deductions from Tier 1 capital items 2.1-2.13 less total amount of adjustments 2.14.1.

2.16 Eligible Tier 1 capital (net Tier 1 capital)

Eligible Tier 1 capital is equivalent to net Tier 1 capital as defined in APS 111: gross Tier 1 capital less total deductions from Tier 1 capital.

Eligible Tier 1 capital must constitute at least 50% of required capital base (refer APS 111).

3. Tier 2 capital

3.1 Upper Tier 2 capital

Include all items defined in APS 111 eligible for inclusion in Upper Tier 2 capital.

3.1.1 ARR

The amount recognised must be net of any fair value gains and losses and any gains or losses on hedges offsetting revaluations included in reserves.

Where a particular asset belongs to a class of assets for which ARR are included in Upper Tier 2 capital and the asset has been identified as impaired and losses arise, the losses may be offset against any existing revaluations of the asset or class of revalued assets.

If an ARR included in Upper Tier 2 capital is negative after adjustment for revaluations of assets included in the reserve, losses due to impairment of assets covered by the reserve and any gains or losses on hedges offsetting revaluations of assets included in the reserve, the amount of deficit in the reserve must be reported as a deduction from Tier 1 capital.

3.1.1.1 Owner-occupied property and investment property

3.1.1.2 Quoted readily marketable securities (designated as available for sale)

To be eligible for inclusion in Upper Tier 2 capital at Level 1 and Level 2, reserves arising from the revaluation of property (owner-occupied and investment property readily available to be sold)[6] and quoted readily marketable securities must satisfy the conditions set out in AGN 111.2 Tier 2 Capital (AGN 111.2). The amount of these reserves to be included in Upper Tier 2 is limited to 45% of pre-tax revaluation reserves and is net of fair value gains and losses and any fair value gains or losses on hedges offsetting revaluations included in reserves. (refer APS 111).

3.1.2 Eligible component of investments in associates/joint ventures/non-consolidated subsidiaries (Level 2) or 3.1.2. Eligible component of investments in associates/joint ventures/subsidiaries (Level 1)

To be eligible for inclusion in Upper Tier 2 capital at Level 1 and Level 2, reserves arising from the changes in value of the investments must satisfy the conditions set out in AGN 111.2. The amount recognised must be net of fair value gains and losses and any gains or losses on hedges offsetting revaluations of investments. For example:

Investment in associate at Year 0 $100

Share of profits in associate in Year 1 $ 15

Share of associate’s ARR in Year 1 $ 5

Report in Item 3.1.2. of ARF 110.0 $9 [i.e. 45% of $(15+5)]

Report in Item 32 of ARF 112.1 $109 [i.e. $100 + $9]

Note that any intangible component of investments will be deducted from Tier 1 capital. (Refer items 2.1 and 2.2).

Please also refer to specific capital rules in APS 111 covering deductions of investments in subsidiaries, deductions of equity investments in non-subsidiary entities that are not operating in the field of finance and deductions of equity and other capital investments in ADIs or equivalent overseas deposit-taking institutions (and their subsidiaries).

3.1.3 General Reserve for Credit Losses

The amount of General Reserve for Credit Losses (See APS 220 Credit Quality (APS 220) for definition of General Reserves for Credit Losses) to be included in Upper Tier 2 capital at Level 1 and Level 2 should be net of any associated DTA, and is limited to a maximum of 1.25% of total risk-weighted exposures (See AGN 110.4 Risk-based Capital Adequacy Framework for definition).

3.1.4 Perpetual cumulative preference shares

3.1.5 Mandatory convertible notes

3.1.6 Perpetual subordinated debt

3.1.7 Other Upper Tier 2 capital instruments

To be eligible as Upper Tier 2 capital at Level 1 and Level 2, these instruments must be perpetual and cumulative in nature and they must satisfy the criteria set out in AGN 111.2.

Item 3.1.7 includes shares issued after 1992 by way of a fully paid bonus issue arising from capitalisation of property revaluation reserves.

3.1.8 Excess Tier 1 capital instruments

Report any excess amounts of Residual Tier 1 capital ineligible for inclusion in Tier 1 capital due to APRA’s prescribed limit (refer APS 111).

3.1.9 Total Upper Tier 2 capital

The sum of Upper Tier 2 capital items 3.1.1-3.1.8.

3.1.10 Adjustments to Upper Tier 2 capital

Include other amounts required to be added to or deducted from Upper Tier 2 capital.

3.1.10.1 Net unrealised gains/(losses) on effective cash flow hedges

Deduct any cumulative unrealised gains and add back any unrealised losses on effective cash flow hedges which do not offset gains or losses on reserves included in Upper Tier 2 capital at Level 1 / Level 2.

3.1.10.2 Other adjustments approved by APRA

Include any additions or deductions to Upper Tier 2 capital that have been approved by APRA, including transition amounts affecting Upper Tier 2 capital at Level 1 / Level 2.

3.1.11 Deductions from Upper Tier 2 capital

3.1.11.1 Holdings of own Upper Tier 2 capital instruments and any unused trading limit agreed with APRA

Refer AGN 111.4.

3.1.12. Eligible Upper Tier 2 capital

Item 3.1.9, total Upper Tier 2 capital less item 3.1.10.1 Net unrealised gains/(losses) on effective cash flow hedges plus item 3.1.10.2. Other adjustments approved by APRA less item 3.1.11.1. Holdings of own upper tier 2 capital instruments and any unused trading limit agreed with APRA

3.2 Lower Tier 2 capital

Includes items defined in APS 111 eligible for inclusion in Lower Tier 2 capital.

3.2.1 Term subordinated debt

3.2.2 Limited life redeemable preference shares

3.2.3 Other Lower Tier 2 capital instruments

To be eligible as Lower Tier 2 capital at Level 1 and Level 2, these instruments must satisfy the criteria set out in AGN 111.2.

The amount of an instrument eligible for inclusion in Lower Tier 2 capital at Level 1 and Level 2 is to be amortised on a straight line basis at a rate of 20% per annum over the last 4 years to maturity as follows:

3.2.4 Total Lower Tier 2 capital

The sum of Lower Tier 2 capital items 3.2.1-3.2.3.

3.2.5 Adjustments to Lower Tier 2 capital

3.2.5.1 Other adjustments approved by APRA

Include any additions to or deductions from Lower Tier 2 capital that have been approved by APRA, including transition amounts affecting Lower Tier 2 capital at Level 1 / Level 2.

3.2.6 Deductions from Lower Tier 2 capital

3.2.6.1 Holdings of own Lower Tier 2 capital instruments and any unused trading limit agreed with APRA

Refer AGN 111.4.

3.2.7 Eligible Lower Tier 2 capital

The sum of item 3.2.4 total Lower Tier 2 capital and item 3.2.5.1. Other adjustments approved by APRA less item 3.2.6.1. Holdings of own Lower Tier 2 capital instruments and any unused trading limit agreed with APRA. The amount of Eligible Lower Tier 2 capital is limited to a maximum of 50% of Eligible Tier 1 capital.

3.3 Eligible Tier 2 capital

The sum of item 3.1.12 eligible Upper Tier 2 capital item plus item 3.2.7 Eligible Lower Tier 2 capital. The amount of eligible Tier 2 capital is limited to a maximum of 100 per cent of eligible Tier 1 capital.

4. Deductions from total capital

This section includes deductions required to be taken from the sum of total eligible Tier 1 and Tier 2 capital in accordance with APS 111.

4.1 Equity and other capital investments in other ADIs and equivalent overseas deposit-taking institutions (and their subsidiaries)

Deduct equity and other capital investments in other ADIs or equivalent overseas deposit-taking institutions (and their subsidiaries) at Level 1 and Level 2 except where:

(a) that other ADI or equivalent overseas deposit-taking institution is wholly owned or effectively controlled (whether directly or indirectly) by the reporting ADI, and has been consolidated with the reporting ADI at Level 2 for capital adequacy purposes; or

(b) the capital instruments of the other ADI or equivalent overseas deposit-taking institution are held for trading purposes, in which case they are to be included in the reporting ADI’s total risk-weighted exposures at Level 1 and Level 2 in accordance with Prudential Standard APS 113 Capital Adequacy: Market Risk (APS 113).

4.2 Equity and other capital investments in holding companies of ADIs (and equivalent entities overseas)

Deduct equity and other capital investments in holding companies of ADIs or equivalent entities overseas at Level 1/Level 2, unless these are held for trading purposes in which case they are to be included in the ADI’s total risk-weighted exposures at the respective level in accordance with APS 113.

4.3 Equity and other capital investments in non-consolidated subsidiaries and controlled entities (Level 2)

Deduct equity and other capital investments in non-consolidated subsidiaries or controlled entities (other than captive lenders mortgage insurers) after any intangible component of the investment is deducted from Tier 1 capital at Level 2 (refer AGN 110.2 Non-consolidated Subsidiaries and AGN 111.4). This deduction does not apply to a subsidiary holding company where it acts as a holding company for investments only in subsidiary ADIs or equivalent overseas deposit-taking institutions. (Refer APS 111.)

Other capital investments include debt capital instruments held and provision of any credit support of a capital nature (e.g. provision of a first loss guarantee).

4.4 Credit support of a capital nature provided to other entities outside the consolidated banking group at Level 2 (Level 2) or 4.3 credit support of a capital nature provided to other entities (Level 1)

Deduct any credit support of a capital nature provided to any entities (including non-related) at Level 1 or to entities that do not form part of the consolidated banking group at Level 2. This includes provision of a first loss guarantee, including any undertakings by the ADI to absorb designated first level of losses on claims supported by it. (First loss facilities associated with funds management and the securitisation of assets should be deducted in accordance with the requirements set out in APS 120.)

4.5 Non-repayable loans advanced by the ADI under APRA’s certified industry support arrangements (Level 2) or 4.4 non-repayable loans advanced by the ADI under APRA’s certified industry support arrangements (Level 1)

Deduct any non-repayable loans advanced by the reporting ADI to another ADI under APRA’s certified industry support arrangements at both Level 1 and Level 2.

4.6 Other capital deductions as advised by APRA (Level 2) or 4.5 other capital deductions as advised by APRA (Level 1)

Include other deductions from total capital advised by APRA.

4.7 Total deductions from total capital (Level 2) or 4.6 total deductions from total capital (Level 1)

Sum all deductions from total capital at Level 1 and Level 2.

5. Level 1 capital base or 5 Level 2 capital base

The sum of eligible Tier 1 and Tier 2 capital less deductions from total capital.

6. Memo item

6.1 Total General Reserve for Credit Losses net of associated DTA

Report the total amount of General Reserve for Credit Losses net of any associated DTA. These amounts should be reported irrespective of whether they are included in the capital base. (Refer APS 220.)

Note: The total General Reserve for Credit Losses reported under this memo item is not limited to 1.25 per cent of total risk-weighted exposures.

Section B: Risk profile

1. Credit risk category

This section allocates balance sheet amounts and the credit equivalent amounts of off-balance sheet business at Level 1 and Level 2 to individual credit risk-weight categories.

Column 1.1

Classifies the gross amounts of balance sheet assets (i.e. the principal amounts of on-balance sheet assets after adjustment for any accrued interest, revaluations, depreciation and specific provisions as appropriate) into risk weight categories, based on the nature of counterparty or the underlying collateral or guarantor where the balance sheet assets are secured against eligible collateral or guarantee recognised by APRA (see AGN 112.1 Risk-Weighted On-Balance Sheet Credit Exposures).

Column 1.2

Equals the reported figure in Column 1 multiplied by the applicable risk weight.

Column 2.1

Classifies the credit equivalent amounts (CEAs) of off-balance sheet business (including both market and non-market related transactions) into risk weight categories, based on the nature of the counterparty or the underlying collateral or guarantor where the CEAs of the off-balance sheet business are secured against eligible collateral or guarantee recognised by APRA (see AGN 112.2 Risk-Weighted Off-Balance Sheet Credit Exposures).

Column 2.2

Equals the reported figure in Column 2.1 multiplied by the applicable risk weight.

For each risk category, Column 3 equals the sum of Column 1.2 and Column 2.2.

Total credit risk

Is the sum of the assessed credit risk exposures (both on- and off-balance sheet).

2. Market risk charge

This item captures the market risk charge (for both specific and general market risk) as reported in Form ARF 113.0 Market Risk and is determined in accordance with the APS 113. For capital adequacy purposes, the reported amount must be adjusted by multiplying it by a constant factor of 12.5 (i.e. the reciprocal of the minimum capital ratio of 8%) to obtain an equivalent risk-weighted exposure. The resulting figure is then added to the total risk-weighted on and off balance sheet credit exposures, to derive the total risk-weighted exposures (i.e. the denominator of the capital ratio).

3. Other charges as required by APRA

Include other capital charges required by APRA. They should be converted to a measure consistent with other risk-weighted exposures.

Section C: Risk ratio

1. Capital adequacy ratio

This is calculated by dividing capital base by total risk-weighted exposures (i.e. the amount of capital base reported in Section A divided by the sum of total credit risk exposure, market risk charge and other charges as required by APRA reported in Section B).