Summary: APRA has until the end of next year to make sure our banks are “unquestionably strong” but the regulator hasn’t defined what “unquestionably strong” means. APRA has also said international comparisons shouldn’t be the only benchmark for measuring the strength of our banks. The banks have core capital of twice the minimum requirement, with recent capital raisings to boost that further, and score highly on measures such as asset quality and management quality.
Key take-out: Perhaps the banks are closer to being “unquestionably strong” than the market has currently priced.
Key beneficiaries: General investors. Category: Bank stocks.