APRA Penalizes Heritage Bank for Incorrect Reporting of Capital
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized. Consequently, APRA will require Heritage Bank to increase its minimum capital requirement by $5 million through an operational risk capital add-on, until APRA is satisfied that its concerns have been address and weaknesses rectified.
As part of the additional actions initiated as a result of this finding about Heritage Bank, APRA will:
- require Heritage to complete a remediation program to address areas of concern regarding governance, risk management systems, processes, and frameworks
- expect Heritage to assign Accountable Persons under the Banking Executive Accountability Regime, with responsibility for delivering the sustainable change needed at the bank
- launch a targeted self-assessment program to ascertain whether other authorized deposit-taking institutions are similarly affected and address any potential deficiencies
Related Link: Media Release
Keywords: Asia Pacific, Australia, Banking, Operational Risk, Compliance Risk, Reporting, Regulatory Capital, Basel, Heritage Bank, BEAR, Governance, ESG, APRA
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