As per a recent discussion between Australia and New Zealand Banking Group Ltd (ANZ) and Australian Prudential Regulation Authority (APRA), the latter is considering to offer clarification on the composition of the Level 2 Authorised Deposit-Taking Institution (ADI) Group.
ANZ opines it could affect its capital ratios badly, if returns expected from certain debt issued by its wealth management arm are phased out under new regulations, which are aimed at strengthening bank balance sheets.
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According to the press release, ANZ has two debt issues held by ANZ Wealth Australia Ltd of $400m each, maturing in June 2015 and March 2016, respectively.
"Should the change come into effect as currently proposed, it would reduce ANZ’s level 2 capital ratios by about 20 basis points," ANZ said in the press release.
"Consistent with previous prudential changes we expect to meet any additional capital requirements through organic capital generation," ANZ added.
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