Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolios

Australia regulator removes Westpac's add-on liquidity requirement

Published 08/31/2022, 07:46 PM
Updated 08/31/2022, 07:52 PM
© Reuters. FILE PHOTO: A pedestrian looks at his phone as he walks past a logo for Australia's Westpac Banking Corp located outside a branch in central Sydney, Australia, November 5, 2018.   REUTERS/David Gray/File Photo
WBK
-

(Reuters) - Australia's bank regulator said on Thursday Westpac Banking (NYSE:WBK) Corp no longer needs to keep an additional amount of cash reserve after the company took steps to rectify issues related to the regulator's liquidity requirements.

The Australian Prudential Regulation Authority (APRA) in 2020 ordered Westpac to add 10% to the amount of cash it keeps on hand after it fell short of the regulator's standards.

A review of Westpac's risk management by APRA had found it incorrectly calculated several key capital ratios through 2019 and 2020. (https://reut.rs/3Q6r79N)

The bank has since completed a program to remediate findings from an independent review into Westpac's liquidity risk management to APRA's satisfaction, the regulator said on Thursday.

The removal of the liquidity add-on is effective from Sept. 1, while the capital requirement add-on of A$1 billion to reflect Westpac's "heightened" operational risk profile remains in place, according to the regulator.

The removal of the add-on will contribute about 13 percentage points to Westpac's liquidity coverage ratio (LCR), the bank said.

The bank's average LCR for the June quarter was at 130%.

It is unlikely Westpac's reported average LCR will materially rise from current levels in future reporting periods, according to the bank.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.