MITCHELL We have finite capacity. If we could issue A$2 billion (US$1.4 billion) of GSS bonds every year, we would. Bond issuance is a great demonstration of what the bank is doing in the GSS space and also demonstrates our credentials to investors globally. It is becoming an increasingly relevant topic.

Given we have been so active in the space over the last two years it comes down to being able continually to generate the collateral. Our product offering regarding green and social overlays is evolving on the liability side, for example through the uBank green term deposit. We are deploying our collateral into products to suit different investors and customers, which broadens the appeal and reach of what we can do. And to the extent we continue to innovate on the liability side, it will need to be supported on the asset side.

TAPLEY It is similar for ANZ in that the challenge is around the asset base. It is an amortising book and a very competitive loan market, particularly in institutional and corporate lending. With interest rates going down, there is a lot of refinancing so managing the portfolio can be quite challenging. GSS bonds will continue to be part of the annual funding strategy for ANZ – there is certainly no shortage of desire.

JENKINS National Australia Bank (NAB) had an active year in 2018, with four different GSS transactions across US dollars, euros and Australian dollars. This took more than A$2 billion of assets out of our eligible collateral pool.

There is certainly no shortage of demand – we are asked by investors all the time whether we are doing more. We would love to do more so we are looking at all possible opportunities.

For example, NAB is a big agriculture bank so we are looking into opportunities in agriculture and forestry. Renewable energy is extremely competitively banked so our balance-sheet growth has been constrained in this space. There is capital recycling, too, so loans are being refinanced and we are bringing on new ones.

When we look at bond issuance, our preference is to issue benchmark deals. Our first Australian dollar deal was A$300 million and next time we issue a GSS bond in Australia we would like to have another benchmark-sized transaction. We also have the potential to issue more social bonds and we are working on this too. I think 2020 will be an active year for NAB.

MITCHELL At the outset of setting up these programmes and putting together NAB’s frameworks for green and social bonds, we were more than happy to do bespoke, niche offerings to get the market started and demonstrate capacity.

But we have reached a point of greater maturity in the market globally so we are now focused on benchmark offerings that fit in as a regular part of our funding toolbox.