The Australian Prudential Regulation Authority (APRA) has removed the $500 million additional capital it imposed on National Australia Bank (NAB) in response to issues identified in the bank’s risk governance self-assessment.
APRA imposed the $500 million capital injection in July 2019 in response to non-financial risk management and risk culture weaknesses identified in its self-assessment. It was one of 36 of the country’s largest banks, insurers and superannuation administrators that APRA asked to undertake risk governance self-assessments following the Preventive Inquiry into Commonwealth Bank of Australia.
At the time, APRA said the additional capital would remain in place until NAB completed its rehabilitation program and closed the gaps identified in its self-assessment.
APRA is now satisfied that NAB has completed the remedial program and adequately addressed the issues raised in the risk governance self-assessment. As a result, APRA removed the additional $500 million of capital with immediate effect.
APRA member Therese McCarthy Hockey said:
“National Australia Bank is a well-funded and strongly capitalized institution, but it is equally important that the entities we supervise have effective governance and risk management cultures. Where our regulated entities fall short in these areas, APRA will not hesitate to use its full enforcement power to protect the community from potential harm.”