Banks – Consolidated Group Impaired Assets

These data are derived from returns submitted to the Australian Prudential Regulation Authority (APRA) by banks authorised under the Banking Act 1959. APR assumed responsibility for the supervision and regulation of banks on 1A July 1998. Data prior to that date were submitted to the RBA.

Prior to March 2002, banks reported to APR on the Impaired Assets Return. From that date, banks report quarterly on ARF 220.0: Impaired Assets.

aConsolidated groupa, for a locally incorporated bank, refers to the global operations of the bank and its subsidiaries, excluding those involved in insurance, funds management/trustee and non-financial business. For a foreign bank authorised to operate in Australia as a branch, the data relate to the operations of the branch only.

aTotal assetsa includes the total on-balance sheet assets reported to APR by locally incorporated banks for capital adequacy purposes, and the assets of the Australian bank operations of foreign bank branches.

aImpaired assetsa refers to the aggregate of a reporting bankas non-accrual and restructured exposures, both on- and off-balance sheet, plus any assets acquired through the enforcement of security conditions. Off-balance sheet exposures include, inter alia, commitments to provide funds that cannot be cancelled or revoked and the credit equivalent amounts of interest rate, foreign exchange and other market-related instruments.

aNon-accrual itemsa refers to exposures on which income may no longer be accrued ahead of its receipt because there is doubt about the ultimate collectibility of principal and/or interest. Included are facilities where contractual payments of principal and/or interest are 90 or more days in arrears (or which have remained continuously outside approved limits for 90 or more days) and the associated security is insufficient to cover payment of principal and accrued interest.

aRestructured itemsa refers to exposures, not classified as non-accrual, where the original contractual terms have been modified to provide for concessions of interest or principal, for reasons related to customersa financial difficulties, which render the facilities anon-commerciala to the bank.

aOther real estate owneda (OREO) refers to real estate acquired through security enforcement or otherwise as settlement for outstanding obligations. Excluded are properties controlled under amortgagee in possessiona rights.

aOther assets acquireda refers to all other assets acquired through security enforcement or otherwise as settlement for outstanding obligations.

aWrite-offsa refers to the aggregate value of items written off against provisions or profits during the period.

aPast-due itemsa refers to items that are 90 or more days in arrears but are well secured and have no provisions held against them. Items classified as impaired assets are excluded.

aSpecific provisionsa includes specific provisions raised against impaired assets as well as those raised against portfolios of loans based on arrears data.

aGeneral provisionsa are reported net of associated future income tax benefits. Foreign bank branches do not report general provisions.

For further information, refer RB Media Release of 18 January 1995 (reprinted in the February 1995 issue of the Bulletin).