ING Australia must hold an additional A$50 million in capital after identifying material errors in its liquidity reporting.
The bank notified the Australian Prudential Regulation Authority (APRA) in July that it had miscalculated its Liquidity Coverage Ratio (LCR) over several years.
ING Australia had reported an LCR of about 160%, but its actual ratio was substantially lower and had at times fallen below the 100% minimum required under Prudential Standard APS 210 Liquidity.
It has since raised its liquidity position to well above the regulatory minimum.
APRA imposed the amount as an operational risk capital add-on and increased the bank’s minimum liquidity requirements.
It also placed conditions on ING Australia’s licence requiring independent reviews of the reporting failures and its broader risk management and governance practices.
The bank must develop a remediation plan and obtain independent assurance that the changes have been implemented and embedded.
The measures will remain until it completes the work to APRA’s satisfaction.
APRA Deputy Chair Therese McCarthy Hockey said,
“ING Australia is one of Australia’s largest banks with more than 2 million customers nationwide and assets of over $100 billion.
As such, APRA expects it to have robust governance and internal controls to support its financial and operational resilience.”
ING Australia has begun strengthening its governance, risk management, regulatory reporting and control frameworks.
Melanie Evans, Chief Executive Officer of ING Australia, said,
“Meeting our regulatory obligations is fundamental to operating as a bank and we have fallen short of the standards we set for ourselves and of the expectations rightly held by APRA. After identifying and self-reporting these issues, we have worked transparently and constructively with APRA to address them.
We regret that these deficiencies existed in our operations and we are committed to meeting APRA’s expectations when it comes to standards of risk management, governance and regulatory reporting.”
The issues relate solely to ING Bank (Australia) Limited and not to ING Bank N.V. Sydney Branch or any other member of the ING Group.
Featured image: Edited by Fintech News Australia, based on image by ING Group via flickr
