Well done, APRA:
To: All authorised deposit-taking institutions and insurers
Banks and insurers have a critical role to play in supporting Australian households, businesses and the broader economy during this period of significant disruption caused by COVID-19. APRA has made recent adjustments to regulatory requirements and timetables, including the ability for entities to use capital buffers if needed, with this support very much in mind.
In this context, APRA expects ADIs and insurers to limit discretionary capital distributions in the months ahead, to ensure that they instead use buffers and maintain capacity to continue to lend and underwrite insurance. This includes prudent reductions in dividends, taking into account the uncertain outlook for the operating environment and the need to preserve capacity to prioritise these critical activities.
