From the AFR:
National Australia Bank has admitted that it could be forced to re-assess its future dividend payment plans in response to tough new rules that will require banks to hold billions of dollars more in capital as it posted an annual profit of almost $6 billion.
As it released its full year profit results on Thursday, NAB said its capital management strategy would be “assessed” once the new ruled being planned by the Australian Prudential Regulation Authority were finalised.
The Australian Financial Review reported exclusively on Thursday that APRA had told the major banks to maintain “adequate capital buffers” so they can meet the new requirements for “Domestic Systemically Important Banks” to have more money in reserve.
…“APRA is expected to implement a Domestic Systemically Important Banks framework by 1 January 2016, with further detail expected during the first half of the 2014 financial year,” NAB said in a document released with its annual results.
“Depending on the size of the D-SIB capital charge, there may be an impact on the group’s capital targets and capital management strategy. This will be assessed once further information is received from APRA.”
These extra charges cannot be high enough. Arguments against the big four being D-SIBs are indefensible.
