Changes announced today by banking regulator APRA are good news for Greater Building Society customers according to CEO Don Magin.
APRA has revised Prudential Standard APS 111 Capital Adequacy: Measurement of Capital to give credit unions, building societies and mutual banks more flexibility to issue regulatory capital instruments while retaining their structure.
Mr Magin said that when APRA implemented the Basel III capital changes 16 months ago, the rules were designed for large, listed banks and not for customer owned banking institutions such as The Greater.
He said whilst The Greater is very strongly capitalised and will always use retained earnings as its primary source of regulatory capital, today’s change provides additional flexibility for capital management.
“We are strongly committed to retaining our highly successful customer owned model but we also need additional capacity to raise capital when needed to grow and take strategic opportunities to benefit our customers,” Mr Magin said.
“The Greater and other customer owned banking organisations will continue to work with, via its industry association COBA, APRA and other regulators on further accommodation of the customer owned model,” he said.
“We want competitive neutrality in the financial service marketplace because this gives a fair go for our customers and more banking competition to benefit all Australians particularly those in regional Australia.”