ANZ sets aside more capital for housing

ANZ will set aside more capital against its home loan book following an APRA review but claimed it will not have to go to the market for more money.

In a statement released to the Australian Securities Exchange on Thursday, ANZ said the Australian Prudential Regulation Authority had completed a review of the banks' mortgage capital model.  

Under the new model, the bank's common equity Tier I ratio is lowered by 26 basis points, representing an average risk weight applied to its Australian mortgage portfolio of a little over 28.5 per cent.

However, ANZ said it will not need to raise any additional capital as the impact is in line with its latest (2017) capital management plan.

The move comes amidst expectations that the prudential regulator will offer more clarity on "the extent of further capital strengthening required" in late June or early July.

APRA chair Wayne Byres recently put the banks on notice that they will likely need to hold more capital against housing risk.

“As indicated at ANZ’s 2017 first half results, the Group expects APRA to make further changes to sector capital requirements through a clarification to the 'unquestionably strong' capital framework," ANZ said in a release on Thursday.

The lender also reported that its tier one capital ratio had risen from 9.8 per cent to 10.1 per cent - the first time the ratio has been above 10 per cent. 

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