The Australian Prudential Regulation Authority (APRA) has removed a liquidity add-on requirement imposed on Bendigo and Adelaide Bank (Bendigo) for breaching APRA’s prudential standards on liquidity.
APRA took action against Bendigo in 2020 in response to its multiple breaches of APS 210 Liquidity that demonstrated weaknesses in the bank’s risk management practices and ability to accurately calculate and report its liquidity ratios.
A 10 per cent add-on was applied to the net cash outflow component of Bendigo’s Liquidity Coverage Ratio (LCR) calculation, increasing the amount of liquid assets that Bendigo needed to hold.1
Bendigo has since completed a comprehensive review into the bank’s adherence with APRA’s liquidity requirements and a remediation plan which addresses the weaknesses to APRA’s satisfaction. The removal of the liquidity add-on is effective from today.
