Macquarie Bank Limited (MBL) is an Authorised Deposit-taking Institution (ADI) regulated by the Australian Prudential Regulation Authority (APRA).
MBL is accredited under the Basel II:
These advanced approaches place a higher reliance on a bank’s internal capital measures and require a more sophisticated level of risk management and risk measurement practices.
APRA requires ADIs to have a minimum ratio of capital to risk weighted assets of 8 per cent at both Level 1 (ELE Group) and Level 2 (Consolidated Banking Group), with at least half of this capital in the form of Tier 1 capital. In addition, APRA imposes ADI specific minimum capital ratios that may be higher than these levels. The MBL Group internal capital policy set by the Board requires capital floors above the minimum regulatory required levels.
The Macquarie Banking Group ratios as at 30 September 2012 are:
|Ratio||As at 30 September 2012|
|Macquarie Banking Group Core Tier 1 capital ratio1||12.0%|
|Macquarie Banking Group Tier 1 capital ratio||13.3%|
|Macquarie Banking Group Total capital ratio||15.6%|
|1. Core Tier 1 represents Tier 1 excluding hybrid Tier 1 instruments|
APRA is requiring Australian banks to follow an accelerated Basel III implementation compared to the Basel Committee’s gradual phase-in of Basel III, with a minimum Common Equity Tier 1 (CET1) ratio of 4.5% required by January 2013 and immediate phase in of additional CET1 deductions. In addition, APRA has added conservative overlays (‘super equivalence’) to the Basel Committee’s Basel III capital requirements.
Macquarie’s position at 30 September 2012 meets the APRA 2016 Basel III requirements, i.e. minimum ratios plus capital conservation buffer.
New transactions at Macquarie are now evaluated on a fully implemented Basel III basis, and all businesses are operating cognisant of Basel III.
For more information on MBL's capital base read the latest Management Discussion and Analysis.
For more information on APRA's ADI Prudential Framework read the ADI section of the APRA website.