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APRA Starts Consulting on Proposed Changes to Banks' Credit Risk Capital Settings

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The Australian Prudential Regulation Authority (APRA) started consulting on proposed amendments to banks' credit risk capital settings as part of a reform package to bank capital and liquidity settings, the prudential regulator said in a statement on Monday.

Key proposals include allowing a lower risk weight for large domestic public infrastructure exposures and for high-quality unrated corporate exposures, subject to certain criteria, and adjusting criteria to allow for more exposures to qualify for the lower 100% risk weight for residential property development, the regulator said.

APRA plans to finalize credit risk capital changes in the second half of the year for a proposed effective date of April 1, 2027, per the statement.

ANZ Group (ASX:ANZ, NZE:ANZ) shares rose marginally in morning trade in Australia.

Commonwealth Bank (ASX:CBA) shares rose 1%, while National Australia Bank (ASX:NAB) were up nearly 1%.

Westpac Banking (ASX:WBC, NZE:WBC) shares were up almost 1%.

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