Bank completes remediation program, addressing the issues raised in its risk governance self-assessment
The Australian Prudential Regulation Authority (APRA) has lifted a $500 million capital requirement initially imposed on National Australia Bank (NAB).
The move comes after APRA’s acknowledgment of NAB’s successful completion of a remediation program, addressing shortcomings in risk governance identified by the bank itself.
In July 2019, APRA introduced the additional capital requirement due to NAB’s inadequacies in managing non-financial risks and weaknesses in its risk culture. This was part of a broader initiative by APRA, which requested 36 of Australia’s major banks, insurers, and superannuation trustees to conduct self-assessments on risk governance following a prudential inquiry into the Commonwealth Bank of Australia.
APRA had mandated the additional capital to remain until NAB addressed the shortcomings outlined in its self-assessment and completed a comprehensive remediation program. The regulatory authority now confirms that NAB has met these requirements, effectively closing the identified gaps and leading to the removal of the $500m capital add-on with immediate effect.
“National Australia Bank is a well-funded and strongly capitalised institution,” said APRA executive board member Therese McCarthy Hockey (pictured). “However, it is just as important that the entities we oversee have effective governance and risk management cultures.
“Where our regulated entities fall short in these areas, APRA won’t hesitate to use its full suite of enforcement power to protect the community from potential harm.”
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