(Off-Quarter-Overseas Incorporated Registered Banks) Order 2008
ANAND SATYANAND, Governor-General
Order in Council
At Wellington this 25th day of February 2008
Present:
His Excellency the Governor-General in Council
Pursuant to section 81 of the Reserve Bank of New Zealand Act 1989, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the advice of the Minister of Finance given in accordance with a recommendation of the Reserve Bank of New Zealand, makes the following order.
Contents
Page
1 Title 1103
2 Commencement 1103
3 Application 1103
4 Interpretation 1103
Part 1
Form, frequency, and publication of short form disclosure statements
5 Short form disclosure statement 1109
6 First short form disclosure statement 1109
7 Timing of first publication of short form disclosure statement 1110
8 First publication of short form disclosure statement 1110
9 Ongoing publication of short form disclosure statement 1110
Part 2
Content of short form disclosure statements
Subpart 1-General requirements
10 Information must be in English 1111
11 Short form disclosure statement not to be false or misleading 1112
12 Requirements when registered bank is unable to disclose information 1112
13 Information covering period less than stated period 1112
14 Comparative information 1112
15 Short form disclosure statement not to contain offer of securities 1112
16 Information about shareholders 1113
17 Disclosure of currency that is not New Zealand dollars 1113
Subpart 2-Content of key information summary, general short form
disclosure statement, and supplemental disclosure statement
Key information summary
18 Information to be included in key information summary 1113
General short form disclosure statement
19 Information to be included in general short form disclosure statement 1114
Supplemental disclosure statement
20 Information to be included in supplemental disclosure statement 1114
Part 3
Miscellaneous provisions
Length of first quarter accounting period or third quarter
accounting period (as applicable)
21 Length of first quarter accounting period or third quarter accounting
period (as applicable) 1115
Revocation
22 Revocation 1115
Transitional provision for short-form disclosures for 31 March 2008
off-quarter balance date
23 Transition 1115
Schedule 1 1116
Information to be included in key information summary
Schedule 2 1121
Information to be included in general short form disclosure statement
Schedule 3 1127
Short form financial statements and asset quality
Schedule 4 1131
Credit and market risk exposures and capital adequacy
Schedule 5 1135
Concentration of credit exposures to individual counterparties
Schedule 6 1138
Risk management policies
---------
Order
1 Title
This order is the Registered Bank Disclosure Statement
(Off-Quarter-Overseas Incorporated Registered Banks) Order 2008.
2 Commencement
This order comes into force on 30 March 2008.
3 Application
This order applies to every registered bank incorporated overseas.
4 Interpretation
(1) In this order, unless the context otherwise requires,-
accounting period has the same meaning as in section 2(1) of the Companies Act 1993
Act means the Reserve Bank of New Zealand Act 1989
address for service, in relation to-
(a) an individual, means the address of their usual place of business in New Zealand or, if no such address exists, the address of their usual place of business outside New Zealand; or
(b) a company, means the address for service adopted by the company under section 192 of the Companies Act 1993; or
(c) any other entity, means the address of its principal office or principal place of business in New Zealand or, if no such address exists, its principal office or principal place of business outside New Zealand
allowance for credit impairment loss means an amount which has been created against identified credit losses or in respect of an identified deterioration in the value of any asset or class of asset attributable to an increase in credit risk as set out in NZ IAS 39 paragraphs 58 to 62
applicable financial reporting standard has the same meaning as in section 2(1) of the Financial Reporting Act 1993
approved financial reporting standard has the same meaning as in section 2(1) of the Financial Reporting Act 1993
asset acquired through the enforcement of security means any asset that is legally owned as the result of enforcing security, other than a building occupied by the bank
associated person has the same meaning as in section 2(2) of the Act
bank means a registered bank or an overseas bank
banking group, in relation to a registered bank,-
(a) means the financial reporting group; but
(b) if the Reserve Bank has, by notice in writing to the registered bank, after consultation with the registered bank, agreed to or required the inclusion or exclusion of any entity or any part of any entity, means the financial reporting group including or excluding that entity or that part of that entity, as the case may be
capital, in relation to an overseas bank or overseas banking group, means the amount of capital held by the overseas bank or overseas banking group, determined in accordance with the requirements of the authority having the power to impose minimum capital requirements on that overseas bank or overseas banking group in its country of domicile
Capital Adequacy Framework (Basel I Approach) (BS2) means the current version of the Reserve Bank document entitled "Capital Adequacy Framework (Basel I Approach) (BS2)"
Capital Adequacy Framework (Standardised Approach) (BS2A) means the current version of the Reserve Bank document entitled "Capital Adequacy Framework (Standardised Approach) (BS2A)"
collective credit impairment allowance means an allowance for credit impairment loss on groups of financial assets
company-
(a) has the same meaning as in section 2(1) of the Companies Act 1993; and
(b) includes an overseas company within the meaning of that section
conditions of registration, in relation to a registered bank, means the current conditions of registration imposed on that registered bank by the Reserve Bank under section 74 of the Act
counterparty has the same meaning it has in the definition of "group of closely related counterparties" in NZ IFRS 7
credit risk has the same meaning as in NZ IFRS 7
currency risk has the same meaning as in NZ IFRS 7
director, in relation to an overseas bank, means a person occupying the position of director of the overseas bank by whatever name called who whether by himself or herself, or in conjunction with other directors acting as a board of directors, has the powers necessary for managing, and for directing and supervising the management of, the business and affairs of the overseas bank
disclosure statement has the same meaning as in section 2(1) of the Act
equity refers to and has the same meaning as "equity" in the "New Zealand Equivalent to the IASB Framework for the Preparation and Presentation of Financial Statements" approved by the Accounting Standards Review Board as amended from time to time.
equity exposure, in relation to a banking group, means the amount of the change in the economic value of equity instruments that are financial assets and financial liabilities of the banking group in a single currency, which would occur as a result of a change in the price of equity instruments in that currency
equity risk means the risk arising from changes in the prices of equity instruments
fair value has the same meaning as in NZ IAS 32
financial asset has the same meaning as in NZ IAS 32
financial asset acquired through the enforcement of security has the same meaning as in NZ IFRS 7
financial instrument has the same meaning as in NZ IAS 32
financial liability has the same meaning as in NZ IAS 32
financial reporting group means the New Zealand business of all the members of the group (as that term is defined in section 2(1) of the Financial Reporting Act 1993) that comprises a reporting entity that is the overseas bank and its subsidiaries, as if the members of the group were companies formed and registered in New Zealand
first quarter accounting period means-
(a) the first 3 month period of an accounting period; or
(b) if clause 21 applies, the first quarter accounting period determined by the Reserve Bank
generally accepted accounting practice has the same meaning as in section 3 of the Financial Reporting Act 1993
group of closely related counterparties has the same meaning as in NZ IFRS 7
holding company has the same meaning as in section 5 of the Companies Act 1993
immediate relative, in relation to any person, means their spouse, civil union partner, or de facto partner (as defined in the Property (Relationships) Act 1976), and any parent, brother, sister or child, in each case whether or not adoptive, of that person or of their spouse, civil union partner, or de facto partner
independent director, in relation to an overseas bank, means a director who is not-
(a) an employee of the overseas bank; and
(b) a director, trustee, or employee of-
(i) a holding company of the overseas bank; or
(ii) any other entity capable of controlling or significantly influencing the overseas bank
individual credit impairment allowance means an allowance for credit impairment loss on individual assets
individually impaired asset means a financial asset that is individually determined to be impaired at reporting date in accordance with NZ IAS 39 paragraphs 58 to 62
insurance business, in relation to a registered bank, has the same meaning as in the conditions of registration for the registered bank
interest rate repricing date, in relation to the whole or part of a financial instrument, means the earlier of the date on which, in accordance with the terms of the financial instrument,-
(a) the interest rate reset date next occurs (being the date on which the rate of interest payable in respect of the whole or part (as applicable) of the financial instrument can or will alter); or
(b) a principal sum is due and payable; or
(c) if no principal sum is due and payable, the maturity date occurs
interest rate risk has the same meaning as in NZ IFRS 7
issuer has the same meaning as in section 4 of the Financial Reporting Act 1993
material,-
(a) in relation to a statement, fact, or item to which generally accepted accounting practice applies, has the meaning given to it by generally accepted accounting practice; or
(b) in relation to a statement, fact, or item to which generally accepted accounting practice does not apply, means that the inclusion or omission of the statement, fact, or item, or the method of treating the disclosure of the statement, fact, or item, would be likely to influence a reasonable user of the disclosure statement
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand
New Zealand chief executive officer has the same meaning as in section 2(1) of the Act
NZ IAS 24-
(a) means New Zealand Equivalent to International Accounting Standard 24 (Related Party Disclosures), approved under the Financial Reporting Act 1993; and
(b) includes amendments to that standard
NZ IAS 32-
(a) means New Zealand Equivalent to International Accounting Standard 32 (Financial Instruments: Disclosure and Presentation), approved under the Financial Reporting Act 1993; and
(b) includes amendments to that standard
NZ IAS 34-
(a) means New Zealand Equivalent to International Accounting Standard 34 (Interim Financial Reporting), approved under the Financial Reporting Act 1993; and
(b) includes amendments to that standard
NZ IAS 39-
(a) means New Zealand Equivalent to International Accounting Standard 39 (Financial Instruments: Recognition and Measurement), approved under the Financial Reporting Act 1993; and
(b) includes amendments to that standard
NZ IFRS 7-
(a) means New Zealand Equivalent to International Financial Reporting Standard 7 (Financial Instruments: Disclosures) approved under the Financial Reporting Act 1993; and
(b) includes amendments made to that standard
90 day past due asset has the same meaning as in NZ IFRS 7 and to avoid doubt includes an asset other than a restructured asset, other individually impaired asset, or financial asset acquired through the enforcement of security, for which, in relation to the contracted terms, conditions, or limits that applied to the asset immediately before non-performance commenced-
(a) any payment of principal, interest, or other forms of monies owing is overdue, or has not been paid in accordance with the asset's terms and conditions, for at least 90 days; or
(b) amounts owing under revolving facilities have been continuously outside of limits for at least 90 days
non-financial asset acquired through the enforcement of security means any asset which is legally owned as the result of enforcing security, other than a financial asset or a building occupied by the bank
off-quarter balance date means the last day of a first quarter accounting period or third quarter accounting period (as applicable)
other asset acquired through the enforcement of security means any asset which is legally owned as the result of enforcing security, other than a financial asset or a land or building asset
other asset under administration means any asset that is not an impaired asset or a 90 day past due asset, but where the counterparty-
(a) is in receivership, liquidation, bankruptcy, statutory management, a no asset procedure, voluntary administration, or any other form of administration in New Zealand; or
(b) is in any other equivalent form of voluntary or involuntary administration in an overseas jurisdiction
other individually impaired asset has the same meaning as in NZ IFRS 7
overseas bank means a financial institution incorporated outside New Zealand which has been authorised, registered, or licensed as a bank in its country of domicile by the appropriate banking supervisory authority and, unless the context otherwise requires, is the bank of which the registered bank is the New Zealand branch
overseas banking group means an overseas bank and all other entities included in the group for the purposes of public reporting of group financial statements in the country of domicile of the overseas bank
premises, in relation to a registered bank, means any staffed premises of the registered bank, or an agency of the registered bank, to which the registered bank's customers or potential customers have access in order to conduct banking business
rate insensitive assets means that amount of the financial assets held by the banking group that the registered bank reasonably believes is unlikely to be diminished or increased as a result of a material change in market interest rates if the interest rate applicable to that financial asset (which may be zero) does not change or does not change materially
rate insensitive liabilities means that amount of the financial liabilities held by the banking group that the registered bank reasonably believes is unlikely to be diminished or increased as a result of a material change in market interest rates if the interest rate applicable to that financial liability (which may be zero) does not change or does not change materially
rate insensitive product means a rate insensitive asset or a rate insensitive liability
real estate asset acquired through the enforcement of security means any land or building which is legally owned as the result of enforcing security, other than a building occupied by the bank
register means the register of registered banks maintained under section 69 of the Act
registered bank means the New Zealand business of the entity that is entered on the register, as if that entity's business were conducted by a company formed and registered in New Zealand
related party has the same meaning as in NZ IAS 24
responsible person means a person authorised in writing by a director or the New Zealand chief executive officer to sign the disclosure statement of a registered bank in accordance with section 82 of the Act
restructured asset has the same meaning as in NZ IFRS 7
retail deposit has the same meaning as in the conditions of registration
short form disclosure statement means a disclosure statement that comprises the documents set out in clause 5(1)
subsidiary means a subsidiary within the meaning of sections 5 to 8 of the Companies Act 1993
third quarter accounting period means-
the first 9 month period of an accounting period; or
(b) if clause 21 applies, the third quarter accounting period determined by the Reserve Bank
tier one capital, in relation to an overseas bank or overseas banking group, means the amount of tier one capital held by the overseas bank or overseas banking group determined in accordance with the requirements of the authority having the power to impose minimum capital requirements on that overseas bank or overseas banking group in its country of domicile
ultimate holding company, in relation to a registered bank, means the body corporate that-
(a) is the registered bank's holding company; and
(b) is not itself a subsidiary of another body corporate; and
(c) is not a bank
ultimate parent bank, in relation to a registered bank, means the bank that-
(a) is the registered bank's holding company; and
(b) is not itself a subsidiary of another bank
working day means a day of the week on which the head office of a registered bank is open for business.
(2) A term or expression that is used in this order, but not defined in it,-
(a) has, in relation to a registered bank whose conditions of registration define the term or expression, the same meaning as in those conditions of registration, as amended from time to time; or
(b) has, if paragraph (a) does not apply and the term or expression is defined in the Act, the same meaning as in the Act; or
(c) must, if neither paragraph (a) nor paragraph (b) applies, be interpreted in a way that complies with generally accepted accounting practice, where applicable.
Part 1
Form, frequency, and publication of short form
disclosure statements
5 Short form disclosure statement
(1) The short form disclosure statement of a registered bank comprises-
(a) a key information summary; and
(b) a general short form disclosure statement; and
(c) a supplemental disclosure statement (if any).
(2) A requirement that applies to a short form disclosure statement applies to each of the documents referred to in subclause (1).
6 First short form disclosure statement
The first short form disclosure statement required by this order for a registered bank is for the first off-quarter balance date that occurs after 30 March 2008.
7 Timing of first publication of short form disclosure statement
(1) A registered bank must first publish its key information summary, general short form disclosure statement, and its supplemental disclosure statement (if any)-
(a) in the manner specified in clause 8; and
(b) on the same date.
(2) The date referred to in subclause (1)(b) must be no later than 2 months after each off-quarter balance date unless subclause (3) applies.
(3) The date referred to in subclause (1)(b) must be no later than 3 months after each off-quarter balance date if-
(a) the general short form disclosure statement is subject to review or audit by an external auditor; and
(b) the extent of review or audit is not less than that which is required in respect of a disclosure statement in terms of the Registered Bank Disclosure Statement (Full and Half-Year-Overseas Incorporated Registered Banks) Order 2008.
8 First publication of short form disclosure statement
On the applicable date referred to in clause 7, a registered bank must first publish its short form disclosure statement by-
(a) delivering a signed short form disclosure statement to the Reserve Bank; and
(b) prominently displaying a copy of its most recent key information summary at-
(i) the registered bank's head office; and
(ii) every branch of the registered bank; and
(iii) every other premises of the registered bank; and
(iv) every premises of an agency of the registered bank primarily engaged in the business of the registered bank; and
(c) making a copy of its most recent key information summary, general short form disclosure statement, and supplemental disclosure statement (if any), readily accessible on the registered bank's website.
9 Ongoing publication of short form disclosure statement
(1) During the publication period, a registered bank must publish its short form disclosure statement by-
(a) providing to any person who requests it a copy of its most recent key information summary immediately on request and at no charge; and
(b) providing to any person who requests it a copy of its most recent general short form disclosure statement at no charge and-
(i) immediately on request if the request is made at the registered bank's head office; or
(ii) within 5 working days if the request is made at a branch of the registered bank, any other premises of the registered bank, or any premises of an agency of the registered bank primarily engaged in the business of the registered bank; and
(c) providing to any person who requests it a copy of its most recent supplemental disclosure statement, or such part of it as is requested, at no charge, and-
(i) immediately on request if the request is made at the registered bank's head office; or
(ii) within 5 working days if the request is made at a branch of the registered bank, any other premises of the registered bank, or any premises of an agency of the registered bank primarily engaged in the business of the registered bank; and
(d) prominently displaying a copy of its most recent key information summary at-
(i) the registered bank's head office; and
(ii) every branch of the registered bank; and
(iii) every other premises of the registered bank; and
(iv) every premises of an agency of the registered bank primarily engaged in the business of the registered bank; and
(e) making a copy of its most recent key information summary, general short form disclosure statement, and supplemental disclosure statement (if any), readily accessible on the registered bank's website; and
(f) if the registered bank provides banking accounts to customers through a branch that is not normally physically accessible by the customers of that branch,-
(i) notifying each customer of that branch of the availability of its most recent key information summary; and
(ii) stating that the key information summary is available immediately on request and at no charge.
(2) Subclause (1)(c) does not apply if the content of a supplemental disclosure statement is included in the general short form disclosure statement.
(3) For the purposes of subclause (1), publication period, in relation to a registered bank, means the period that-
(a) starts on the date on which the short form disclosure statement of the registered bank is first published; and
(b) ends on the date on which the next disclosure statement of the registered bank is first published.
Part 2
Content of short form disclosure statements
Subpart 1-General requirements
10 Information must be in English
(1) All information in the short form disclosure statement of a registered bank must be in English.
(2) Nothing in subclause (1) applies to copies of guarantee contracts.
11 Short form disclosure statement not to be false or misleading
In addition to the information that is required by this order, the short form disclosure statement of a registered bank-
(a) must contain such other information that, in the opinion of the directors and New Zealand chief executive officer, is necessary or desirable to ensure that the short form disclosure statement is not false or misleading in any material particular; and
(b) except as otherwise expressly provided in this order, may contain any other information that the directors and New Zealand chief executive officer consider appropriate.
12 Requirements when registered bank is unable to disclose information
Subject to clause 14(3), if a registered bank is unable because of systems limitations or because of circumstances beyond its control to disclose information under this order, the short form disclosure statement must-
(a) state that fact, and explain those limitations or circumstances; and
(b) contain the closest available alternative to the information that must be disclosed under this order.
13 Information covering period less than stated period
(1) A short form disclosure statement that contains information for a period that is less than the period for which the information is required under this order must identify the period for which the information is provided.
(2) A registered bank need not disclose information under this order about a person, business, or group for that part of a period during which the person, business, or group or any part of the group did not exist.
14 Comparative information
(1) Any comparative information that is required to be disclosed under this order for the previous corresponding period must be restated so that it corresponds to the information disclosed for the current period.
(2) If there has been a material restatement of prior period amounts, the nature of, and the reason for, the restatement must be disclosed.
(3) A registered bank need not disclose comparative information that is not readily available in the 12 months after the date on which that information was first required to be published.
15 Short form disclosure statement not to contain offer of securities
A short form disclosure statement-
(a) must not contain any offer (within the meaning of section 2 of the Securities Act 1978) of securities; but
(b) may contain information required for the purposes of regulations 21(2) and 22(d) of the Securities Regulations 1983.
16 Information about shareholders
The short form disclosure statement of a registered bank must not state or imply that a person is, or intends to become, a shareholder of the overseas bank, or of a member of the overseas banking group, without also stating whether that person guarantees any of the obligations of the registered bank or any member of the banking group.
17 Disclosure of currency that is not New Zealand dollars
A registered bank must disclose the currency used if information is disclosed in a currency that is not New Zealand dollars.
Subpart 2-Content of key information summary, general short form disclosure statement, and supplemental disclosure statement
Key information summary
18 Information to be included in key information summary
(1) The key information summary of a registered bank must include the information prescribed in Schedule 1-
(a) in respect of its most recent off-quarter balance date, or first quarter accounting period, or third quarter accounting period (as applicable); and
(b) in the same order and under the same headings set out in that schedule.
(2) If a key information summary would be false or misleading as a result of stating the information required to be disclosed under this order, the key information summary must, under the relevant heading, include information and explanations that will make the key information summary not false or misleading.
(3) If applicable, the information contained in the key information summary must be taken from the information contained in the general short form disclosure statement.
(4) The key information summary may contain additional information to which the information required in Schedule 1 may refer by way of note, but only if that information is set out after the information required to be disclosed under that schedule.
(5) The information that is required to be disclosed under clauses 4 to 8 of Schedule 1 must include comparative figures for the previous corresponding period.
General short form disclosure statement
19 Information to be included in general short form disclosure statement
The general short form disclosure statement of a registered bank must include all of the information prescribed in Schedules 2 to 6.
Supplemental disclosure statement
20 Information to be included in supplemental disclosure statement
(1) The supplemental disclosure statement must include only the following information (if it applies):
(a) if paragraph (b) does not apply and the general short form disclosure statement states that a person guarantees any material obligations of the overseas bank, a copy of the-
(i) full guarantee contract; and
(ii) most recent financial statements and group financial statements of the guarantor; and
(iii) auditor's report (if any) for those statements:
(b) if the general short form disclosure statement states that a person has entered into a material cross guaranteeing arrangement with the overseas bank, a copy of the full guarantee contract if-
(i) there is a single contract that sets out the rights and obligations of all the cross guarantors; or
(ii) there is a standard contract which is representative of the rights and obligations of each of the cross guarantors:
(c) a copy of the most recent publicly available financial statements of the overseas bank and overseas banking group:
(d) if the overseas bank carries on in New Zealand any insurance business that is outside the banking group, a copy of the most recent publicly available financial statements and group financial statements of that insurance business:
(e) if the overseas bank carries on in New Zealand any non-financial activities that are outside the banking group, a copy of the most recent publicly available financial statements and group financial statements of those non-financial activities:
(f) any additional information or explanations required to ensure the supplemental disclosure statement is not false or misleading.
(2) Subclause (1) does not apply to the extent that the matters required under that subclause are included in the general short form disclosure statement.
Part 3
Miscellaneous provisions
Length of first quarter accounting period or third quarter accounting period (as applicable)
21 Length of first quarter accounting period or third quarter accounting period (as applicable)
(1) This clause applies if an accounting period of a registered bank will be shorter or longer than 12 months as a result of-
(a) the date of registration of a company in terms of the Companies Act 1993; or
(b) a change in the balance date (as defined in section 7 of the Financial Reporting Act 1993) of a registered bank or company.
(2) If this clause applies, the Reserve Bank may, after consultation with the company or the registered bank, determine the length of any first quarter accounting period or third quarter accounting period (as applicable) for the shorter or longer accounting period.
Revocation
22 Revocation
(1) The Registered Bank Disclosure Statement (Off-Quarter-Overseas Incorporated Registered Banks) Order 2007 is revoked.
(2) Despite the revocation of the Registered Bank Disclosure Statement (Off-Quarter-Overseas Incorporated Registered Banks) Order 2007, a short form disclosure statement for an off-quarter balance date that occurred during the period that that order was in force must be completed, and published, in accordance with that order.
Transitional provision for short-form disclosures for 31 March 2008
off-quarter balance date
23 Transition
(1) This clause applies to a short form disclosure statement for a registered bank that is for an off-quarter balance date of
31 March 2008.
(2) The short form disclosure statement may be completed and published in accordance with either-
(a) This order; or
(b) The Registered Bank Disclosure Statement
(Off-Quarter-Overseas Incorporated Registered Banks) Order 2007 as in force immediately before that order expired on 30 March 2008 as if that order had not expired.
(3) However, subclause (2) applies only if the short form disclosure statement states that it is prepared under this clause.
(4) This clause applies despite clause 6.
----------
Schedule 1
Information to be included in key information summary
Contents
Page
1 Introductory statement for customers of registered bank 1116
2 Corporate information 1116
3 Credit rating 1116
4 Profitability 1117
5 Size 1117
6 Capital adequacy 1117
7 Asset quality 1118
8 Peak credit exposure concentrations 1118
9 Ranking of local creditors in liquidation 1118
10 Non-consolidated activities 1119
11 Financial statements of overseas bank and overseas banking group 1120
12 Statement about availability of general short form disclosure
statement and supplemental disclosure statement 1120
13 Auditor's report 1120
---------
1 Introductory statement for customers of registered bank
The following statement:
"The purpose of this key information summary is to provide customers and potential customers with information about the financial condition of their bank.
Neither the New Zealand Government nor the Reserve Bank of New Zealand guarantees or insures bank deposits.
The information contained in the key information summary is explained in the Reserve Bank publication Your Bank's Disclosure Statement - What's In It For You? That publication can be obtained from the *[Reserve Bank] *[Reserve Bank and the [name of registered bank]]."
*Delete if not applicable
2 Corporate information
The following information:
(a) the name of the overseas bank and its country of domicile:
(b) if applicable, the name of any person that is the ultimate parent bank of the overseas bank and its country of domicile:
(c) if applicable, the name of any person that is the ultimate holding company of the overseas bank and its country of domicile.
3 Credit rating
If the registered bank is required, by a notice given to it under section 80 of the Act, to obtain or maintain a rating of its creditworthiness or financial condition by a person nominated or approved by the Reserve Bank, with respect to each rating obtained or maintained by the registered bank that complies with the notice given under section 80 of the Act, the following information:
(a) the name of the person who gave the rating:
(b) the type of rating:
(c) the current rating and all qualifications to that rating:
(d) any change made to the rating in the 2 years immediately before the off-quarter balance date and the date on which the change occurred.
4 Profitability
The following information:
(a) the net profit or loss after tax in respect of-
(i) the overseas banking group for the most recent period for which the information is publicly available, specifying the period and end date to which this information applies; and
(ii) the banking group over the first quarter accounting period or third quarter accounting period (as applicable), specifying the period and end date to which this information applies:
(b) the net profit or loss after tax over the previous 12 month period, expressed as a percentage of the average of total assets, in respect of-
(i) the overseas banking group and the end date of the most recent period for which the information is publicly available; and
(ii) the banking group and the off-quarter balance date of the first quarter accounting period or third quarter accounting period (as applicable).
5 Size
The following information:
(a) total assets of the overseas banking group as at the most recent date for which the information is publicly available and the percentage change in total assets over the 12 months ending on that date:
(b) total assets of the banking group and the percentage change in total assets over the 12 months ending on the current off-quarter balance date.
6 Capital adequacy
The most recent publicly available information on the capital adequacy of the overseas bank and overseas banking group, including the following information:
(a) tier one capital ratio, and the minimum percentage of this ratio required by the appropriate banking supervisory authority in the overseas bank's country of domicile:
(b) total capital ratio, and the minimum percentage of this ratio required by the appropriate banking supervisory authority in the overseas bank's country of domicile.
7 Asset quality
(1) The information in subclause (2) in respect of-
(a) the overseas banking group as at the most recent date for which the information is publicly available: and
(b) the banking group.
(2) The following information:
(a) total individually impaired assets (before allowances for credit impairment loss and net of interest held in suspense):
(b) total individually impaired assets expressed as a percentage of total assets:
(c) total individual credit impairment allowance:
(d) total individual credit impairment allowance expressed as a percentage of total impaired assets
(e) total collective credit impairment allowance:
(f) non-financial assets acquired through the enforcement of security.
8 Peak credit exposure concentrations
(1) The following information for the first quarter accounting period or the most recent quarter of the third quarter accounting period (as applicable):
(a) the number of individual non-bank counterparties or groups of closely related counterparties of which a bank is not the parent to which the banking group has a peak end-of-day aggregate credit exposure which equals or exceeds 10% of the overseas banking group's equity, in successive ranges of 10% of the overseas banking group's equity:
(b) the number of individual bank counterparties or groups of closely related counterparties of which a bank is the parent to which the banking group has a peak end-of-day aggregate credit exposure which equals or exceeds 10% of the overseas banking group's equity, in successive ranges of 10% of the overseas banking group's equity.
(2) The information disclosed under subclause (1) must be calculated using the methodology set out in Schedule 5.
(3) A statement that the information disclosed under subclause (1) excludes exposures to the central government of any country with a long-term credit rating of A- or A3 or above, or its equivalent.
9 Ranking of local creditors in liquidation
(1) A statement whether, in a liquidation of an overseas bank, there are any material legislative or regulatory restrictions in the overseas bank's country of incorporation that subordinate the claims of any class of unsecured creditors of the registered bank on the assets of the overseas bank to those of any other class of unsecured creditors of the overseas bank.
(2) If subclause (1) applies, the following information:
(a) the title of the legislation or regulations involved and a summary of the nature of the subordination of the rights of creditors of the registered bank:
(b) the nature and amount of each class of the registered bank's liabilities that are so affected:
(c) if the registered bank is required by any statute to hold in New Zealand an excess of assets over deposit liabilities, the title of the statute and a description of the requirement and a statement as to whether, since the commencement of the accounting period, the registered bank has at all times complied with that requirement:
(d) if the overseas bank is subject to any regulatory or legislative requirement in the overseas bank's country of incorporation to maintain sufficient assets in that country to cover an ongoing obligation to pay deposit liabilities in that country-
(i) the title of the legislation or regulations that impose the requirement; and
(ii) a description of the requirement; and
(iii) a statement that the requirement has the potential to impact on the management of the liquidity of the New Zealand operations of the overseas bank.
10 Non-consolidated activities
(1) A statement whether the overseas bank carries on in New Zealand any insurance business that is outside the banking group.
(2) If subclause (1) applies, the following information:
(a) the total assets, total equity, and total profits before and after tax of the insurance business on a consolidated basis, and if the insurance business is carried on by an overseas incorporated company, separately in respect of the overseas company's group and that group's New Zealand business:
(b) a statement that-
(i) the most recent publicly available financial statements and group financial statements for the insurance business are contained in the registered bank's supplemental disclosure statement or general short form disclosure statement (state which); and
(ii) copies of the registered bank's supplemental disclosure statement or general short form disclosure statement (or that part of which, as applicable) will be provided at no charge to any person requesting a copy in the manner described in clause 12.
(3) A statement whether the overseas bank carries on in New Zealand any non-financial activities that are outside the banking group.
(4) If subclause (3) applies, the following information:
(a) the total assets, total equity, and total profits before and after tax of the non-financial activities on a consolidated basis, and if the non-financial activities are carried on by an overseas incorporated company, separately in respect of the overseas company's group and that group's New Zealand business:
(b) a statement that-
(i) the most recent publicly available financial statements and group financial statements for the non-financial activities are contained in the registered bank's supplemental disclosure statement or general short form disclosure statement (state which); and
(ii) copies of the registered bank's supplemental disclosure statement or general short form disclosure statement (or that part of which, as applicable) will be provided at no charge to any person requesting a copy in the manner described in clause 12.
11 Financial statements of overseas bank and overseas banking group
A statement that a copy of the most recent publicly available financial statements of the overseas bank and overseas banking group are contained in the registered bank's supplemental disclosure statement or general short form disclosure statement (state which).
12 Statement about availability of general short form disclosure statement and supplemental disclosure statement
A statement-
(a) that a copy of the registered bank's most recent general short form disclosure statement and supplemental disclosure statement (if applicable) will be provided immediately at no charge to any person requesting a copy if the request is made at the registered bank's head office; and
(b) that a copy of the registered bank's most recent general disclosure statement and supplemental disclosure statement (if applicable) are available on the registered bank's website; and
(c) specifying the categories of places where a copy of the registered bank's most recent general short form disclosure statement and supplemental disclosure statement (if applicable) will be provided at no charge to any person within 5 working days of a request for a copy having been made.
13 Auditor's report
If the key information summary has been audited or reviewed by an external auditor, the following:
(a) a statement of the nature and scope of the audit or review:
(b) a copy of the auditor's report.
----------
Schedule 2
Information to be included in general short form
disclosure statement
Contents
Page
1 Name and address for service of registered bank 1121
2 Details of overseas bank 1121
3 Changes in overseas bank's board of directors 1121
4 Details of ultimate parent bank and ultimate holding company 1121
5 Subordination of claims of creditors 1122
6 Requirement to hold excess assets over deposit liabilities 1122
7 Requirement to maintain sufficient assets to cover ongoing obligation
to pay deposit liabilities 1122
8 Guarantees 1122
9 Details of guarantor 1122
10 Details of guaranteed obligations 1123
11 Availability of copy of full guarantee contract 1123
12 Material cross guarantees 1124
13 Conditions of registration 1124
14 Credit rating 1125
15 Insurance business 1125
16 Non-consolidated activities 1125
17 Directors' and New Zealand chief executive officer's statements 1126
18 Financial statements of overseas bank and overseas banking group 1126
19 Absence of supplemental disclosure statement 1127
20 Auditor's report 1127
---------
1 Name and address for service of registered bank
The name and address for service of the registered bank.
2 Details of overseas bank
The name and the address of the overseas bank's principal office, or place of business, outside New Zealand.
3 Changes in overseas bank's board of directors
(1) A statement whether there have been any changes in the composition of the overseas bank's board of directors since the date on which the signing of the previous disclosure statement is completed, and if so, the changes involved, and the name of each director affected by the changes.
(2) If applicable, the name of each director, and the New Zealand chief executive officer, on whose behalf each responsible person has signed the short form disclosure statement.
4 Details of ultimate parent bank and ultimate holding company
If applicable,-
(a) the name and address for service of the ultimate parent bank of the overseas bank; and
(b) the name and address for service of the ultimate holding company of the overseas bank; and
(c) a summary of any regulations, legislation, or other restrictions of a legally enforceable nature that may materially inhibit the legal ability of the bodies corporate referred to in paragraphs (a) and (b) to provide material financial support to the registered bank.
5 Subordination of claims of creditors
(1) A statement whether there are any material legislative or regulatory restrictions in the overseas bank's country of incorporation that, in a liquidation of the overseas bank, subordinate the claims of any class of unsecured creditors of the registered bank on the assets of the overseas bank to those of any other class of unsecured creditors of the overseas bank.
(2) If subclause (1) applies,-
(a) the title of the legislation or regulations involved; and
(b) the nature of the subordination of the rights of creditors of the registered bank; and
(c) the nature and amount of each class of the registered bank's liabilities that are affected.
6 Requirement to hold excess assets over deposit liabilities
If the registered bank is required by any statute to hold in New Zealand an excess of assets over deposit liabilities,-
(a) the title of the statute; and
(b) a description of the requirement; and
(c) a statement whether, since the commencement of the accounting period, the registered bank has at all times complied with that requirement.
7 Requirement to maintain sufficient assets to cover ongoing obligation to pay deposit liabilities
If the overseas bank is subject to any regulatory or legislative requirement in the overseas bank's country of incorporation to maintain sufficient assets in that country to cover an ongoing obligation to pay deposit liabilities in that country,-
(a) the title of the legislation or regulations that impose the requirement; and
(b) a description of the requirement; and
(c) a statement that the requirement has the potential to impact on the management of the liquidity of the New Zealand operations of the overseas bank.
8 Guarantees
(1) A statement whether any material obligations of the overseas bank are guaranteed.
(2) If a person guarantees any material obligations of the overseas bank, and clause 12 does not apply, the matters set out in clauses 9 to 11.
9 Details of guarantor
(1) The name and address for service of the guarantor.
(2) A statement whether the guarantor is a member of the banking group or overseas banking group.
(3) Either-
(a) the amount of the net tangible assets of the guarantor as shown in the most recent publicly available audited financial statements, together with any qualifications in the auditor's report on those financial statements that reflect on the statement of those assets in the financial statements; or
(b) if the guarantor is a bank, the most recent publicly disclosed capital of the guarantor and the guarantor group expressed as an amount and as a percentage of risk weighted exposures, and the date to which that measure of capital relates.
(4) A statement whether the guarantor has any credit ratings applicable to its long term senior unsecured obligations payable in the currency of the country of its incorporation, and if so, in respect to each such rating-
(a) the name of the person who gave the credit rating; and
(b) the current rating and all qualifications to that rating; and
(c) each change made to the rating in the 2 years immediately before the off-quarter balance date and the date on which that change occurred; and
(d) descriptions or explanations of all steps in the applicable rating scales.
10 Details of guaranteed obligations
(1) A description of the obligations that are guaranteed.
(2) A statement whether there are any limits on the amount of the obligations guaranteed and, if so, a brief summary of the nature of those limits.
(3) A statement whether there are any material conditions applicable to the guarantee other than non-performance by the principal obligor and, if so, a brief summary of those conditions.
(4) A statement whether there are any material legislative or regulatory restrictions in the guarantor's country of incorporation that, in a liquidation of the guarantor, would have the effect of subordinating the claims under the guarantee of any of the creditors of the overseas bank on the assets of the guarantor to other claims on the guarantor.
(5) If there are any such material legislative or regulatory restrictions,-
(a) the title of the legislation or regulations involved; and
(b) the nature of the subordination of the rights of the creditors; and
(c) the amount of the liabilities that are affected.
11 Availability of copy of full guarantee contract
(1) A statement that a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the full guarantee contract, will be provided immediately at no charge to any person requesting a copy if the request is made at the registered bank's head office.
(2) The categories of places where a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the full guarantee contract, will be provided at no charge to any person within 5 working days of a request for a copy having been made.
(3) Subclauses (1) and (2) do not apply if the content of the supplemental disclosure statement is contained in the general short form disclosure statement.
12 Material cross guarantees
(1) If a person has entered into a material cross guaranteeing arrangement with the overseas bank, the matters set out in subclauses (2) to (4).
(2) A description of the guaranteeing group and the nature of the cross guaranteeing arrangement.
(3) The matters required to be disclosed under clause 10(2) to (5) as if those clauses applied to the guarantees of the obligations of the overseas bank, as well as to the guarantees the overseas bank has given in respect of the first mentioned person's obligations.
(4) If there is a single contract that sets out the rights and obligations of all the cross guarantors, or if there is a standard contract which is representative of the rights and obligations of each of the cross guarantors, a statement-
(a) that a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the full guarantee contract, will be provided immediately at no charge to any person requesting a copy if the request is made at the registered bank's head office; and
(b) specifying the categories of places where a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the full guarantee contract, will be provided at no charge to any person within 5 working days of a request for a copy having been made.
(5) Subclause (4) does not apply if the content of the supplemental disclosure statement is contained in the general short form disclosure statement.
13 Conditions of registration
(1) A copy of the conditions of registration that applied at the date on which the signing of the short form disclosure statement is completed.
(2) If applicable, a description of any changes to the conditions of registration that have occurred since the signing of the previous disclosure statement is completed, including the dates on which the changes occurred.
(3) A statement of the date on which the conditions of registration of the registered bank came into effect.
(4) If the registered bank has not complied with all conditions of registration over the first quarter accounting period or the third quarter accounting period (as applicable), a description of the nature and extent of each case of non-compliance.
14 Credit rating
If the registered bank is required, by a notice given to it under section 80 of the Act, to obtain or maintain a rating of its creditworthiness or financial condition by a person nominated or approved by the Reserve Bank, with respect to each rating obtained or maintained by the Registered Bank that complies with the notice given under section 80 of the Act, the following information:
(a) the name of the person who gave the rating:
(b) the type of rating:
(c) the current rating and all qualifications to that rating:
(d) any change made to the rating in the 2 years immediately before the off-quarter balance date and the date on which the change occurred:
(e) descriptions or explanations of all steps in the applicable rating scales.
15 Insurance business
A statement whether the banking group carries on any insurance business, and if it does, the following information:
(a) a description of each class of that insurance business:
(b) the aggregate amount of insurance business, where the amount disclosed is calculated in accordance with the registered bank's conditions of registration:
(c) comparative figures for the previous corresponding period for the information that is required to be disclosed under paragraph (b).
16 Non-consolidated activities
(1) A statement whether the overseas bank carries on any insurance business or non-financial activities in New Zealand that are outside the banking group, and if it does, the following information:
(a) a brief explanation of the overseas bank's involvement in that insurance business or those non-financial activities:
(b) the total assets, total equity, and total profits before and after tax of that insurance business on a consolidated basis, and if that insurance business is carried on by an overseas incorporated company, separately in respect of the overseas company's group and that group's New Zealand business:
(c) the total assets, total equity, and total profits before and after tax of those non-financial activities on a consolidated basis, and if those non-financial activities are carried on by an overseas incorporated company, separately in respect of the overseas company's group and that group's New Zealand business:
(d) comparative figures for the previous corresponding period for the information that is required to be disclosed under paragraphs (a) to (c).
(2) If the content of the supplemental disclosure statement is not included in the general short form disclosure statement, a statement-
(a) that a copy of the registered bank's most recent supplemental disclosure statement (or that part of which, as applicable), which contains the most recent publicly available financial statements and group financial statements for insurance business carried on in New Zealand that is outside the banking group or for non-financial activities carried on in New Zealand that are outside the banking group, will be provided immediately and at no charge to any person requesting a copy if the request is made at the registered bank's head office; and
(b) specifying the categories of places where a copy of the registered bank's most recent supplemental disclosure statement (or that part of which, as applicable), which contains the most recent publicly available financial statements and group financial statements for insurance business carried on in New Zealand that is outside the banking group or for non-financial activities carried on in New Zealand that are outside the banking group, will be provided at no charge and within 5 working days of a request for a copy having been made if the request is not made at the registered bank's head office.
17 Directors' and New Zealand chief executive officer's statements
(1) A statement by the directors and the New Zealand chief executive officer as to whether each director and the New Zealand chief executive officer believes, after due enquiry, that, as at the date on which the short form disclosure statement is signed,-
(a) the short form disclosure statement contains all the information that is required by this order; and
(b) the short form disclosure statement is not false or misleading.
(2) A statement by the directors and the New Zealand chief executive officer as to whether each director and the New Zealand chief executive officer believes, after due enquiry, that, over the first quarter accounting period or third quarter accounting period (as applicable),-
(a) the registered bank has complied with all conditions of registration that applied during that period; and
(b) the registered bank had systems in place to monitor and control adequately the banking group's material risks, including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk, and other business risks, and that those systems were being properly applied during that period.
18 Financial statements of overseas bank and overseas banking group
(1) A statement-
(a) that a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the most recent publicly available financial statements of the overseas bank and overseas banking group, will be provided immediately and at no charge to any person requesting a copy if the request is made at the registered bank's head office; and
(b) specifying the categories of places where a copy of the registered bank's most recent supplemental disclosure statement, which contains a copy of the most recent publicly available financial statements of the overseas bank and overseas banking group, will be provided at no charge to any person within 5 working days of a request for a copy having been made.
(2) Subclause (1) does not apply if the content of the supplemental disclosure statement is contained in the general short form disclosure statement.
19 Absence of supplemental disclosure statement
If the content of the supplemental disclosure statement is contained in the general disclosure statement, a statement that the registered bank has not published a supplemental disclosure statement, giving the reason.
20 Auditor's report
If the general short form disclosure statement has been audited or reviewed by an external auditor, the following:
(a) a statement of the nature and scope of the audit or review:
(b) a copy of the auditor's report.
----------
Schedule 3
Short form financial statements and asset quality
Contents
Page
Short form financial statements
1 Currency must be New Zealand dollars 1128
2 Comparative information 1128
3 Changes in accounting policies 1128
4 Financial information 1128
Asset quality
5 Classes of assets to which clauses 6 to 8 apply 1130
6 Aggregate amounts 1130
7 Movements in balances of total individual credit impairment
allowances or allowances for impairment loss created in respect of
non-financial assets 1130
8 Movements in balance of collective credit impairment allowance 1131
9 Credit risk on loans and receivables at fair value 1131
----------
Short form financial statements
1 Currency must be New Zealand dollars
Any monetary amount that is required to be disclosed under clause 4 must be New Zealand dollars
2 Comparative information
The information that is required to be disclosed under clause 4 must include comparative figures for the previous corresponding period.
3 Changes in accounting policies
(1) A statement whether there have been any changes in accounting policies since the date on which the signing of the previous disclosure statement is completed.
(2) A summary of those changes.
4 Financial information
(1) The financial information that is required to be disclosed under this clause-
(a) must be in the format determined by the registered bank; and
(b) is for the banking group; and
(c) is for the first quarter accounting period or third
quarter accounting period (as applicable), or is as at the
off-quarter balance date, as the case may require.
(2) The following information, to the extent that it is additional to the information that NZ IAS 34 requires the banking group to disclose when publishing interim financial statements:
Income Statement
1 Interest income
2 Interest expense
3 Net interest income
4 Net trading gains/losses
5 Other gains less losses on financial instruments at fair value
6 Other operating income
7 Other operating expenses
8 Impaired asset expense
9 Share of the profit or loss of associates and joint ventures accounted for using the equity method
10 Profit/(loss) before tax
11 Taxation expense/(credit)
12 Profit(loss) after tax
13 Profit/(loss) attributable to minority interest
14 Profit/(loss) attributable to equity holders of the parent
15 A condensed statement of changes in equity or a statement of recognised income and expense
Balance sheet
Assets
1 The categories of financial asset listed in paragraph E3 of NZ IFRS 7, in each case shown net of individual credit impairment allowances
2 Derivative financial instruments
3 Deferred tax asset
4 Intangible assets
5 Fixed assets
6 Other assets
7 Total assets
Liabilities and branch equity
8 Head office account
9 Issued and paid up capital
9 Balances of reserve accounts
(a) Revaluation reserves
(b) Fair value reserves
(c) Other capital reserves
(d) Other revenue reserves
10 Balance of retained earnings
11 Minority interests
12 Total head office account and equity
12 Term and/or perpetual subordinated debt
13 The categories of financial liability listed in paragraph E3 of NZ IFRS 7
14 Derivative financial instruments
15 Deferred tax liability
16 Other liabilities
17 Total liabilities and branch equity
18 Total interest earning and discount bearing assets
19 Total interest and discount bearing liabilities
20 Total amounts due from related parties
21 Total amounts due to related parties
22 If assets shown in the statement of financial position have been used to secure any obligations, the nature and amount of those assets
23 The nature and amount of any assets not legally owned but shown in the statement of financial position
24 The total liabilities of the registered bank in New Zealand, net of amounts due to related parties (including amounts due to a subsidiary or affiliate of the registered bank)
25 If applicable, the total retail deposits of the registered bank in
New Zealand, as defined in the registered bank's conditions of registration.
Asset quality
5 Classes of assets to which clauses 6 to 8 apply
(1) Clauses 6 to 8 apply to the following classes of assets:
(a) other individually impaired assets:
(b) restructured assets:
(c) financial assets acquired through the enforcement of security:
(d) real estate assets acquired through the enforcement of security:
(e) other assets acquired through the enforcement of security:
(f) 90 day past due assets:
(g) other assets under administration.
(2) To avoid doubt, the disclosure required by clause 6 includes financial assets designated as at fair value through profit and loss, where applicable.
6 Aggregate amounts
(1) The information in subclause (2) in respect of the banking group for each of the classes of assets set out in clause 5.
(2) The following information as at the off-quarter balance date:
(a) the aggregate amount that has been recognised, before deducting allowances for credit impairment loss or allowances for impairment loss created in respect of non-financial assets where applicable; and
(b) the aggregate amount of individual credit impairment allowances or allowances for impairment loss created in respect of non-financial assets.
(3) The information in subclause (4) in respect of the registered bank and banking group for each of the classes of assets set out in subclauses (a), (b), (f) and (g) of clause 5.
(4) The aggregate amount as at the balance date of any undrawn balances on lending commitments to counterparties for whom drawn balances fall within that class of assets, before deducting allowances for credit impairment loss where applicable.
(5) The information that is required to be disclosed under subclauses (2) and (4) must include comparative figures for the previous corresponding period.
7 Movements in balances of total individual credit impairment allowances or allowances for impairment loss created in respect of non-financial assets
(1) The information in subclause (2) in respect of the banking group for each of the classes of assets set out in clause 5.
(2) Information on movements in the balances of total individual credit impairment allowances or allowances for impairment loss created in respect of non-financial assets over the first quarter accounting period or third quarter accounting period (as applicable), separately disclosing-
(a) opening balance; and
(b) charge (credit) to the statement of financial performance for increase or decrease in individual credit impairment allowances or allowances for impairment loss created in respect of non-financial assets; and
(c) amounts written-off; and
(d) write-downs of assets acquired through the enforcement of security; and
(e) recoveries of impairment allowances and write-offs charged in previous periods; and
(f) other movements, and the nature of those other movements; and
(g) closing balance.
(3) Movements must be reconciled to the charges allocated to the statement of financial performance.
8 Movements in balance of collective credit impairment allowance
(1) The information in subclause (2) in respect of the banking group.
(2) Information on movements in the balance of the collective credit impairment allowance over the first quarter accounting period or third quarter accounting period (as applicable), separately disclosing-
(a) opening balance; and
(b) charge (credit) to the statement of financial performance for increase or decrease in the collective credit impairment allowance; and
(c) other movements, and the nature of those other movements; and
(d) closing balance.
(3) Movements must be reconciled to the charges allocated to the statement of financial performance.
9 Credit risk on loans and receivables at fair value
(1) The information in subclause (2) in respect of the banking group.
(2) The information required to be disclosed by paragraph 9 of NZ IFRS 7, in respect of the first quarter accounting period or third quarter accounting period (as applicable).
----------
Schedule 4
Credit and market risk exposures and capital adequacy
Contents
Page
1 Risk-weighted credit risk exposures 1132
2 Additional mortgage information 1132
3 Market risk end-period notional capital charges 1133
4 Market risk peak end-of-day notional capital charges 1133
5 Method for deriving peak end-of-day notional capital charges 1134
6 Capital ratios 1134
---------
1 Risk-weighted credit risk exposures
(1) The information in subclause (2)-
(a) in respect of the registered bank and banking group; and
(b) derived in accordance with the Capital Adequacy Framework (Basel I Approach) (BS2).
(2) The following information as at the off-quarter balance date:
Risk weighted exposures
(1) Calculation of balance sheet exposures
Amount Risk weight Risk weighted exposure
Cash and short term claims on Government 0%
Long term claims on Government 10%
Claims on banks 20%
Claims on public sector entities 20%
Residential mortgages 50%
Other 100%
Total assets
(2) Calculation of off-balance sheet exposures
Amount Credit conversion factor Credit equivalent amount Average counterparty risk weight Risk weighted exposure
Direct credit substitutes 100%
Asset sales with recourse 100%
Commitments with certain drawdown 100%
Underwriting and sub-underwriting facilities 50%
Transaction related contingent items 50%
Short term, self liquidating trade related contingencies 20%
Other commitments to provide financial services which have an original maturity of 1 year or more 50%
Other commitments with an original maturity of less than 1 year or which can be unconditionally cancelled at any time 0%
Market related contracts (a) foreign exchange contracts(b) interest rate contracts(c) other NA
Total off-balance sheet exposures
Risk weighted exposures
2 Additional mortgage information
(1) The information in subclause (2) -
(a) in respect of the banking group; and
(b) in respect of total residential mortgage loans and derived in accordance with the definition of loan-to-valuation ratio specified in Capital Adequacy Framework (Standardised Approach) (BS2A).
(2) The following information as at the balance date:
Residential mortgages by loan-to-valuation ratio
LVR range 0%-80% 80%-90% Over 90%
Value of exposures
3 Market risk end-period notional capital charges
(1) The information in subclause (2)-
(a) in respect of the banking group; and
(b) derived on the basis that the notional capital charge for each category of market risk is the aggregate capital charge for that category of market risk derived in accordance with the Capital Adequacy Framework (Standardised Approach) (BS2A).
(2) The following information as at the balance date:
Market Risk Implied risk weighted exposure Notional capital charge Notional capital charge as a percentage of the overseas banking group's equity
Interest rate risk
Foreign currency risk
Equity risk
(3) For the purpose of the disclosure required by subclause (2) implied risk weighted exposure must be calculated as 12.5 x notional capital charge.
(4) The information that is required to be disclosed under subclause (2) must include comparative figures for the previous corresponding period.
4 Market risk peak end-of-day notional capital charges
(1) The information in subclause (2)-
(a) in respect of the banking group; and
(b) derived in accordance with clause 5.
(2) The following information in respect of peak end-of-day notional capital charges for market risk for the first quarter accounting period or the most recent quarter of the third quarter accounting period (as applicable):
Market Risk Implied risk-weighted exposure Notional capital charge Notional capital charge as a percentage of the overseas banking group's equity
Interest rate risk
Foreign currency risk
Equity risk
(3) For the purpose of the disclosure required by subclause (2) implied risk-weighted exposure must be calculated as 12.5 x notional capital charge.
(4) The information that is required to be disclosed under subclause (2) must include comparative figures for the previous corresponding period.
5 Method for deriving peak end-of-day notional capital charges
(1) For the purpose of the disclosure required by clause 4, peak end-of-day notional capital charge for each category of market risk is derived by determining the maximum over the relevant period of the aggregate capital charge for that category at the close of each business day derived in accordance with-
(a) Capital Adequacy Framework (Standardised Approach) (BS2A); or
(b) any other method, but only if the aggregate capital charge derived in accordance with that method is not, in the opinion of the registered bank (such opinion to be based on reasonable grounds), materially lower than the amount derived under paragraph (a).
(2) For the purpose of the disclosure required by clause 4, peak end-of-day notional capital charge as a percentage of the overseas banking group's equity is derived by dividing peak end-of-day notional capital charge by-
(a) the overseas banking group's equity as at the end of the quarter; or
(b) the most recently publicly disclosed amount of the overseas banking group's equity; or
(c) the overseas banking group's equity at the date to which the maximum end-of-day notional capital charge applied.
(3) A statement of the method used to derive peak end-of-day notional capital charge, and peak end-of-day notional capital charge as a percentage of the overseas banking group's equity, for each category of market risk.
6 Capital ratios
(1) The most recent publicly available information specified in respect of the capital ratios of the overseas bank and the overseas banking group, including the following information:
(a) tier one capital ratio:
(b) total capital ratio:
(c) the date to which the measures of tier one capital ratio and total capital ratio relate.
(2) The information that is required to be disclosed under subclause (1) must include comparative figures for the previous corresponding period to the extent that the information is publicly available.
----------
Schedule 5
Concentration of credit exposures to individual counterparties
Contents
Page
1 Credit exposure information: general requirements 1135
2 Calculation of credit exposure information 1135
3 Comparative figures 1135
4 Overseas banking group's equity: general requirements 1135
5 Large bank exposures 1136
6 Large non-bank exposures 1136
7 Peak end-of-day aggregate credit exposure 1136
8 Aggregate credit exposure 1136
9 Meaning of credit rating 1137
10 Meaning of investment grade credit rating 1138
---------
1 Credit exposure information: general requirements
(1) In this schedule, credit exposure information must be disclosed on the basis of-
(a) actual credit exposures; or
(b) internal limits that were not materially exceeded during the first quarter accounting period or the third quarter accounting period (as applicable).
(2) A statement of the method used for disclosing the credit exposure information required by this schedule.
2 Calculation of credit exposure information
The credit exposure information required by this schedule must-
(a) relate only to exposures held in the financial records of the banking group; and
(b) be calculated as the amount that best represents the banking group's maximum exposure to credit risk taking account of the guidance in paragraphs B9 and B10 of NZ IFRS7; and
(c) exclude credit exposures to the central government of any country with a long-term credit rating of A- or A3 or above, or its equivalent.
3 Comparative figures
The information that is required to be disclosed under this schedule must include comparative figures for the previous corresponding period.
4 Overseas banking group's equity: general requirements
(1) For the purposes of this schedule, the overseas banking group's equity must be-
(a) determined as at the off-quarter balance date; or
(b) the most recently publicly disclosed amount.
(2) If the overseas banking group's equity is not determined as at the off-quarter balance date, a statement of the date to which the measure of equity relates.
5 Large bank exposures
(1) The information in subclause (2) in successive ranges of 10% of equity, commencing at 10% of equity-
(a) as at the off-quarter balance date; and
(b) in respect of peak end-of-day aggregate credit exposures for the first quarter accounting period or the most recent quarter of the third quarter accounting period (as applicable).
(2) The number of individual bank counterparties (which are not members of a group of closely related counterparties), and groups of closely related counterparties of which a bank is the parent, to which the banking group has an aggregate credit exposure that equals or exceeds 10% of the overseas banking group's equity.
6 Large non-bank exposures
(1) The information in subclause (2) in successive ranges of 10% of equity, commencing at 10% of equity-
(a) as at the off-quarter balance date; and
(b) in respect of peak end-of-day aggregate credit exposures for the first quarter accounting period or the most recent quarter of the third quarter accounting period (as applicable).
(2) The number of individual non-bank counterparties (which are not members of a group of closely related counterparties) and groups of closely related counterparties of which a bank is not the parent to which the banking group has an aggregate credit exposure that equals or exceeds 10% of the overseas banking group's equity.
7 Peak end-of-day aggregate credit exposure
(1) For the purposes of clauses 5 and 6, peak end-of-day aggregate credit exposure to each individual counterparty or a group of closely related counterparties for the first quarter accounting period or the most recent quarter of the third quarter accounting period (as applicable) is derived by-
(a) determining the maximum end-of-day aggregate amount of credit exposure over the quarter; and
(b) then dividing that amount by-
(i) the overseas banking group's equity as at the end of the quarter; or
(ii) the overseas banking group's equity at the date the maximum end-of-day aggregate amount of credit exposure occurred.
(2) A statement of the method used to derive peak ratio information.
8 Aggregate credit exposure
(1) The following information as at the off-quarter balance date and in respect of the individual bank counterparties, and groups of closely related counterparties of which a bank is the parent, referred to in clause 5(2):
(a) the total amount of credit exposure to those counterparties that have a credit rating that is of investment grade:
(b) the total amount of credit exposure to those counterparties that have a credit rating that is below investment grade:
(c) the total amount of credit exposure to those counterparties that do not have a credit rating:
(d) the percentage each of the amounts referred to in paragraphs (a) to (c) represents in relation to the aggregate of the amounts referred to in those paragraphs.
(2) The following information as at the off-quarter balance date and in respect of the individual non-bank counterparties, and groups of closely related counterparties of which a bank is not the parent, referred to in clause 6(2):
(a) the total amount of credit exposure to those counterparties that have a credit rating that is of investment grade:
(b) the total amount of credit exposure to those counterparties that have a credit rating that is below investment grade:
(c) the total amount of credit exposure to those counterparties that do not have a credit rating:
(d) the percentage each of the amounts referred to in paragraphs (a) to (c) represents in relation to the aggregate of the amounts referred to in those paragraphs.
9 Meaning of credit rating
(1) For the purposes of clauses 2 and 8, credit rating means a credit rating that meets the criteria in subclause (2) and that,-
(a) in the case of a group of closely related counterparties, applies to the entity heading the group of closely related counterparties; or
(b) in the case of an individual counterparty (which is not a member of a group of closely related counterparties), applies to the individual counterparty.
(2) The following criteria:
(a) a credit rating that applies to-
(i) the relevant entity's long term senior unsecured obligations payable in New Zealand, in New Zealand dollars; or
(ii) the relevant entity's long term senior unsecured foreign currency obligations:
(b) a credit rating given by a rating agency that has been approved by the Reserve Bank under section 80 of the Act.
(3) If an entity has 2 or more credit ratings that meet the criteria in subclauses (1) and (2) and those credit ratings are not the same, then the lower credit rating applies.
10 Meaning of investment grade credit rating
For the purposes of this schedule, investment grade credit rating means a credit rating of BBB- or Baa3 or above, or its equivalent.
----------
Schedule 6
Risk management policies
Contents
Page
1 Categories of risk 1138
2 Information about risks 1138
---------
1 Categories of risk
Clause 2 applies if, since the date on which the signing of the previous disclosure statement is completed, there has been a material change in the banking group's policies for managing any of the following risks:
(a) credit risk, including concentrations of credit risk, intra-day credit risk, credit risk to bank counterparties and related party credit risk:
(b) currency risk:
(c) interest rate risk:
(d) equity risk:
(e) liquidity risk:
(f) operational risk:
(g) any other material business risk to which the banking group is exposed.
2 Information about risks
(1) A statement of the nature of the changes in the banking group's policies for managing the risks specified in clause 1.
(2) If, since the date on which the signing of the previous disclosure statement is completed, the banking group has become exposed to a new category of risk specified in clause 1 to which the banking group was not previously exposed, the following information:
(a) the nature of that risk and the activities of the banking group that caused the risk:
(b) the methods used to identify and monitor exposure to that risk, including the frequency with which exposures are monitored:
(c) the systems and procedures for controlling that risk, including (if applicable)-
(i) whether exposure limits are employed; and
(ii) any policies with respect to collateral or other security; and
(iii) any policies on the use of financial instruments to mitigate or hedge risks.
REBECCA KITTERIDGE, for Clerk of the Executive Council.
--------
Explanatory note
This note is not part of the order, but is intended to indicate its general effect.
This order, which comes into force on 30 March 2008, applies to a registered bank that is incorporated in a country other than New Zealand, and that operates in New Zealand as a branch of the overseas bank, in respect of each such bank's "off-quarters" (i.e. the first and third quarters of the bank's financial year). It replaces the Registered Bank Disclosure Statement (Off-Quarter-Overseas Incorporated Registered Banks) Order 2007.
The principal amendments to the 2007 Order included in this 2008 Order are to update the drafting of the 2007 Order and to remove references to superseded accounting standards and concepts given that all New Zealand banks have now adopted New Zealand IFRSs and New Zealand IASs.
A description of the principal provisions of the revised disclosure regime is given below.
Under the disclosure regime, all registered banks are required to issue a public disclosure statement each quarter. The disclosure statement required to be published under this order comprises a key information summary, a general short form disclosure statement and, if applicable, a supplemental disclosure statement.
The key information summary provides a brief summary of key financial information on the registered bank and banking group, and must be made available free of charge immediately on request if the request is made at the registered bank's head office. The key information summary must also be displayed prominently in each bank branch and in any other customer-accessible bank premises, and made available or displayed on a bank's internet website.
The general short form disclosure statement is required to contain a range of financial and corporate information on the bank and its banking group. The general short form disclosure statement need not be displayed in each bank branch, but must be made available free of charge, immediately if the request is made at a bank's head office, or within 5 working days if the request is made at a bank branch or at any customer-accessible bank premises other than the head office. It must also be readily available on the bank's internet website. The information required to be included in a general short form disclosure statement includes-
(a) information about credit ratings the bank is required to have, and a disclosure of the current level of each such rating:
(b) short form financial statements for the banking group, including details on asset quality:
(c) information on exposures to credit risk and market risk. A bank is required to disclose measures of exposure to each category of market risk (interest rate risk, currency risk and equity risk) based on a notional capital charge, both as at the end of the off-quarter and in respect of peak over the most recent quarter of the accounting period to date:
(d) information, both as at the end of the off-quarter and in respect of peak for the most recent quarter of the accounting period, on the banking group's exposure concentrations to individual counterparties and groups of closely related counterparties:
(e) descriptions of the banking group's policies and systems for managing risks in respect of a new category of risk not previously incurred by the banking group:
(f) the conditions of registration imposed by the Reserve Bank on the registered bank pursuant to section 74 of the Reserve Bank of New Zealand Act 1989:
(g) statements signed by the directors and the New Zealand chief executive officer of the bank, including an attestation as to whether the directors and the New Zealand chief executive officer are satisfied that the banking group had systems in place to monitor and control adequately the group's material business risks and whether the controls have been properly applied over the reporting period, and a statement that the disclosure statement is not false or misleading.
The general short form disclosure statement required by this order is an abbreviated version of the general disclosure statement required by the Registered Bank Disclosure Statement (Full and Half-Year-Overseas Incorporated Registered Banks) Order 2008.
Each bank must also publish a supplemental disclosure statement, unless the information it would include is contained in the general short form disclosure statement. The supplemental disclosure statement must be made available free of charge, immediately if the request is made at a bank's head office, or within 5 working days if the request is made at a bank branch or at any customer-accessible bank premises other than the head office. It must also be readily available on the bank's internet website. This order requires the following information to be contained in a supplemental disclosure statement:
(a) the contract of guarantee and financial statements of any guarantor, where the material obligations of the overseas bank are guaranteed:
(b) if the overseas bank has entered into any material cross guaranteeing arrangements, a copy of the full guarantee contract if there is a contract which sets out, or is representative of, the rights and obligations of all the cross guarantors:
(c) the most recent publicly available financial statements of the overseas bank and overseas banking group of which the registered bank is part:
(d) if the overseas bank conducts in New Zealand outside the New Zealand banking group any insurance business or non-financial activities, the most recent publicly available financial statements of that business or those activities.
A bank has 2 months from its off-quarter balance date to publish the disclosure statements required by this order. The exception to this is where a bank elects to have its general short form disclosure statement audited by an external auditor, in which case the bank has 3 months to publish its disclosure statement.
The disclosure statements published pursuant to this order are not required to be audited nor to be subject to a limited review by an external auditor.
The disclosure statements required by this order must be signed by all the directors and the New Zealand chief executive officer of the bank. A director or New Zealand chief executive officer may authorise in writing another person to sign on his or her behalf.
The Reserve Bank of New Zealand Act provides for criminal and civil penalties where a bank's disclosure statement is found to be false or misleading.
--------
This Order in Council is administered in the Reserve Bank of New Zealand.
Registered Bank Disclosure Statement
Orders in Council
Documents incorporated by reference
The Registered Bank Disclosure Statement Orders in Council are published pursuant to section 81 of the Reserve Bank of New Zealand Act 1989. They comprise the following four Orders which were made on 25 February 2008 and come into force on 30 March 2008:
Registered Bank Disclosure Statement (Full and Half-Year-New Zealand Incorporated Registered Banks) Order 2008
Registered Bank Disclosure Statement (Off-Quarter-New Zealand Incorporated Registered Banks) Order 2008
Registered Bank Disclosure Statement (Full and Half-Year-Overseas Incorporated Registered Banks) Order 2008
Registered Bank Disclosure Statement (Off-Quarter-Overseas Incorporated Registered Banks) Order 2008
The following documents, which form part of the Reserve Bank of
New Zealand Banking Supervision Handbook, are incorporated by reference into the Orders:
· Capital Adequacy Framework (Basel I Approach) (BS2)
· Capital Adequacy Framework (Standardised Approach) (BS2A)
· Capital Adequacy Framework (Internal Models Based Approach) (BS2B)
· Connected Exposures Policy (BS8)
Copies of these documents are available free of charge on the Reserve Bank of New Zealand's website: http://www.rbnz.govt.nz
Copies may also be inspected free of charge at the Reserve Bank, No 2 The Terrace, Wellington, during normal office hours. The Reserve Bank will accommodate reasonable requests for copies of the documents.
The Orders also refer to the following accounting standards and documents, as amended from time to time:
New Zealand Equivalent to International Accounting Standard 1
-Presentation of Financial Statements (NZ IAS 1)
New Zealand Equivalent to International Accounting Standard 24-Related party Disclosures (NZ IAS 24)
New Zealand Equivalent to International Accounting Standard 32-Financial Instruments: Disclosure and Presentation (NZ IAS 32)
New Zealand Equivalent to International Accounting Standard 34-Interim Financial Reporting (NZ IAS 34)
New Zealand Equivalent to International Accounting Standard 39-Financial Instruments: Recognition and Measurement (NZ IAS 39)
New Zealand Equivalent to International Financial Reporting Standard 7
-Financial Instruments: Disclosures (NZ IFRS 7)
New Zealand Equivalent to the IASB Framework for the Preparation and Presentation of Financial Statements
Copies of the accounting standards are available free of charge on the New Zealand Institute of Chartered Accountants' website: http://www.nzica.com
The New Zealand Equivalent to the IASB Framework for the Preparation and Presentation of Financial Statements is only available in hard copy. Copies
of it and the standards may be inspected free of charge at the office of
the New Zealand Institute of Chartered Accountants, Level 2, Cigna House,
40 Mercer Street, Wellington. Copies of these documents may also be purchased there.
Prudential Supervision Department
Reserve Bank of New Zealand