Mackay Chapman May 2025 APRA Update

In this month’s APRA update:

• Consequential reporting changes to ARS 110.0 – capital adequacy
• APRA accepts enforceable undertaking from ANZ, increases capital add-on to $1 billion
• APRA and ASIC publish latest life insurance claims and disputes data – December 2024
• APRA and RBA release joint statement on overnight standing facility use

Keep reading for more information and key details.

Consequential reporting changes to ARS 110.0 – capital adequacy

APRA has released a response to submissions regarding updates to Reporting Standard ARS 110.0 – Capital Adequacy. 

The changes are focused on liquidity and capital requirements for authorised deposit-taking institutions (ADIs) and interest rate risk in the banking book. 

The APRA website provides more details on the proposed changes, providing further insights into the updates and their implications for ADIs.

APRA accepts enforceable undertaking from ANZ, increases capital add-on to $1 billion

APRA has accepted a Court Enforceable Undertaking (CEU) from ANZ to address persistent weaknesses in the bank's non-financial risk management practices and risk culture. 

The undertaking includes an independent review of the root causes of these issues and a comprehensive remediation plan. 

Additionally, APRA has increased the capital add-on applied to ANZ from $750 million to $1 billion, highlighting ongoing concerns about the bank's operational risk management. 

The capital add-on will remain until APRA is satisfied with ANZ’s remediation efforts.

APRA and ASIC publish latest life insurance claims and disputes data – December 2024

APRA has released its Life Insurance Claims and Disputes Statistics for the 12 months ending 31 December 2024, covering 16 Australian life insurers. 

The data is also available on ASIC’s updated MoneySmart tool, allowing users to compare insurers on key metrics such as claim acceptance rates, claim payment times, disputes, and policy cancellations.

APRA and RBA release joint statement on overnight standing facility use

APRA and the RBA have issued a joint statement on the use of the RBA’s overnight standing facility as part of the RBA’s new monetary policy approach. 

The facility will support banks' liquidity management and help maintain the cash rate target. Both agencies encourage banks to use the facility as needed and will ensure they are well-prepared.

The joint statement is available on the APRA website at: Joint APRA-RBA Statement on Use of the RBA’s overnight standing facility.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.