Australian regulator removes $324 million capital add-on on Westpac

(Reuters) -Australia's prudential regulator said on Wednesday that it has removed the additional A$500 million ($324.15 million) capital add-on on Westpac after the bank completed a required multi-year risk transformation program.  In a separate statement, Westpac said the removal of the capital add-on will increase its common equity tier 1 (CET1) capital ratio by about 17 basis points, reflecting a reduction in risk-weighted assets of A$6.25 billion.  In 2019, the Australian Prudential Regulation Authority pre-emptively imposed a A$1 billion capital add-on in two tranches on the country’s third largest lender. This was followed by a 2020 investigation, which led Westpac to commit to remediating specific prudential weaknesses identified by APRA.   Last year, APRA halved the capital add-on requirement.  "Satisfied that this program is complete, and the specific prudential issues identified by APRA have been addressed, APRA has removed the remaining tranche of A$500 million capital add-on, with immediate effect," APRA said. "The positive changes in how we manage risk must now be maintained and continually strengthened," Westpac CEO Anthony Miller said.  ($1 = 1.5425 Australian dollars) (Reporting by Sneha Kumar in Bengaluru; Editing by Shailesh Kuber and Alan Barona)

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