The Reserve Bank of Australia (RBA) took unprecedented action on 19 March to provide a “bridge” to an expected economic recovery after the COVID-19 crisis. RBA governor Philip Lowe expects the support package to be required for the foreseeable future but says he can see better times on the horizon.
The Australian Prudential Regulation Authority (APRA) is temporarily relaxing expectations on bank capital ratios to ensure banks can continue to provide credit while dealing with funding problems caused by COVID-19, the regulator revealed on 19 March. The announcement followed shortly after the Reserve Bank of Australia (RBA)’s monetary policy decision and the unveiling of further stimulus from the federal government.
On 13 March, Macquarie Bank (A+/A2/A) announced the withdrawal of its A$500 million (US$313.8 million) offer of additional tier-one (AT1) capital, made 11 February and due to be issued 18 March. In a statement to the ASX, Macquarie Bank says the decision to withdraw was made considering significantly changed market conditions in recent weeks.
On 12 March, National Australia Bank (NAB) (AA-/Aa3/AA-) announced the withdrawal of its offer of additional tier-one (AT1) capital, made 25 February and due to be issued 23 March. In a statement to the ASX, NAB says it recognises market conditions have changed substantially since the offer was launched and ongoing market volatility would likely impact on the trading value of the notes.