SGE Credit Union Limited. Prudential Disclosure Document ABN As at 30 September 2013

Transcription

1 SGE Credit Union Limited Prudential Disclosure Document ABN As at 30 September 2013

2 Basis of Preparation In accordance with Australian Prudential Standard APS 330, locally incorporated ADI s adopting the standardised approach under the Basel III regulatory regime are required to disclose information about their capital, credit risk exposure, capital instruments and remuneration. The frequency and timing of SGE s disclosures as required under Prudential Standard APS 330 Public Disclosure are as follows: Table Table 1: Common Disclosure Composition of Capital Regulatory Capital reconciliation Table 2: Main features of Capital Instruments Table 3: Capital Adequacy Table 4: Credit Risk Table 5: Securitisation Remuneration Frequency of Disclosure Annual Annual Continuously Quarterly Quarterly Quarterly Annual Capital Management SGE maintains an actively managed capital base to cover risks inherent in its business. The adequacy of SGE s capital is monitored using, among other measures, the rules and ratios established by the Australian Prudential Regulation Authority. The primary objectives of SGE s capital management are to ensure that the business complies with externally imposed capital requirements and that SGE maintains healthy capital ratios in order to support its activities. SGE has complied in full with all its externally imposed capital requirements. 2

3 Table 1: Common Disclosure Composition of Capital The disclosures below are presented using the post 1 January 2018 common disclosure template as SGE has applied the Basel III regulatory adjustments from 1 March 2013, pursuant to APRA guidelines. Common Equity Tier 1 capital: instruments and reserves 30Jun13 $ Reference to Reconciliation 1Directly issued qualifying ordinary shares (and equivalent for mutuallyowned entities) capital 2Retained earnings 67,524,814 3 Accumulated other comprehensive income (and other reserves) 2,685,005 4Directly issued capital subject to phase out from CET1 (only applicable to mutuallyowned companies) 5Ordinary share capital issued by subsidiaries and held by third parties (amount allowed in group CET1) 6 Common Equity Tier 1 capital before regulatory adjustments 70,209,819 (c) + (d)+ (i) Common Equity Tier 1 capital : regulatory adjustments 7Prudential valuation adjustments 8 Goodwill (net of related tax liability) 9Other intangibles other than mortgage servicing rights (net of related tax liability) 984,325 (g) 10 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) 11 Cashflow hedge reserve 12 Shortfall of provisions to expected losses 13 Securitisation gain on sale (as set out in paragraph 562 of Basel II framework) 14 Gains and losses due to changes in own credit risk on fair valued liabilities 15 Defined benefit superannuation fund net assets 16 Investments in own shares (if not already netted off paidin capital on reported balance sheet) 17 Reciprocal crossholdings in common equity 18 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not above 10% threshold)own more than 10% of the issued share capital (amount 19 Significant investments in the ordinary shares of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold) 20 Mortgage service rights (amount above 10% threshold) 21 Deferred tax assets arising from temporary differences (amount above 10% threshold, 544,538 (h) net of related tax liability) 22 Amount exceeding the 15% threshold 23 of which: significant investments in the ordinary shares of financial entities 24 of which: mortgage servicing rights 25 of which: deferred tax assets arising from temporary differences 26 National specific regulatory adjustments (sum of rows 26a, 26b, 26c, 26d, 26e, 26f, 30,670 (e) 26g, 26h, 26i and 26j) 26a of which: treasury shares 26b of which: offset to dividends declared under a dividend reinvestment plan (DRP), to the extent that the dividends are used to purchase new ordinary shares issued by the ADI 26c of which: deferred fee income 3

4 Table 1: Common Disclosure Composition of Capital (continued) Common Equity Tier 1 capital: instruments and reserves 30Jun13 $ 26d of which: equity investments in financial institutions not reported in rows 18, 19 and 23 Reference to Reconciliation 26e of which: deferred tax assets not reported in rows 10, 21 and 25 26f of which: capitalised expenses 30,670 (e) 26g of which: investments in commercial (nonfinancial) entities that are deducted under APRA prudential requirements 26h of which: covered bonds in excess of asset cover in pools 26i of which: undercapitalisation of a nonconsolidated subsidiary 26j of which: other national specific regulatory adjustments not reported in rows 26a to 26i 27 Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover deductions 28 Total regulatory adjustments to Common Equity Tier 1 1,559, Common Equity Tier 1 Capital (CET1) 68,650,286 Additional Tier 1 Capital: instruments 30 Directly issued qualifying Additional Tier 1 instruments 31 of which: classified as equity under applicable accounting standards 32 of which: classified as liabilities under applicable accounting standards 33 Directly issued capital instruments subject to phase out from Additional Tier 1 1,900, Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties (amount allowed in group AT1) 35 of which: instruments issued by subsidiaries subject to phase out 36 Additional Tier 1 Capital before regulatory adjustments 1,900,000 Additional Tier 1 Capital: regulatory adjustments 37 Investments in own Additional Tier 1 instruments 38 Reciprocal crossholdings in additional Tier 1 instruments 39 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold) 40 Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) 41 National specific regulatory adjustments (sum of rows 41a, 41b and 41c) 41a of which: holdings of capital instruments in group members by other group members on behalf of third parties 41b of which: investments in the capital of financial institutions that are outside the scope of regulatory consolidations not reported in rows 39 and 40 41c of which: other national specific regulatory adjustments not reported in rows 41a and 200,000 (j) 41b 42 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions 43 Total regulatory adjustments to Additional Tier 1 capital 200, Additional Tier 1 capital (AT1) 1,700, Tier 1 Capital (T1=CET1+AT1) 70,350,286 4

5 Table 1: Common Disclosure Composition of Capital (continued) Common Equity Tier 1 capital: instruments and reserves 30Jun13 $ Reference to Reconciliation Tier 2 Capital: instruments and provisions 46 Directly issued qualifying Tier 2 instruments 47 Directly issued capital instruments subject to phase out from Tier 2 866, Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties (amount allowed in group T2) 49 of which: instruments issued by subsidiaries subject to phase out 50 Provisions 895,997 (d) 51 Tier 2 Capital before regulatory adjustments 1,762,663 Tier 2 Capital: regulatory adjustments 52 Investments in own Tier 2 instruments 53 Reciprocal crossholdings in Tier 2 instruments 54 Investments in the Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the ADI does not own more than 10% of the issued share capital (amount above 10% threshold) 55 Significant investments in the Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions 56 National specific regulatory adjustments (sum of rows 56a, 56b and 56c) 56a of which: holdings of capital instruments in group members by other group members on behalf of third parties 56b of which: investments in the capital of financial institutions that are outside the scope of regulatory consolidation not reported in rows 54 and 55 56c of which: other national specific regulatory adjustments not reported in rows 56a and 56b 57 Total regulatory adjustments to Tier 2 capital 58 Tier 2 capital (T2) 1,762, Total capital (TC=T1+T2) 72,112, Total riskweighted assets based on APRA standards 319,506,972 Capital ratios and buffers 61 Common Equity Tier 1 (as a percentage of riskweighted assets 21.49% 62 Tier 1 (as a percentage of riskweighted assets) 22.02% 63 Total capital (as a percentage of riskweighted assets) 22.57% 64 Buffer requirement (minimum CET1 requirement of 4.5% plus capital conservation buffer of 2.5% plus any countercyclical buffer requirements expressed as a percentage 7.00% of riskweighted assets) 65 of which: capital conservation buffer requirement 2.50% 66 of which : ADIspecific countercyclical buffer requirements 67 of which: GSIB buffer requirement (not applicable) 68 Common Equity Tier 1 available to meet buffers (as a percentage of riskweighted assets) National minima (if different from Basel III) 21.49% 69 National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) n/a 70 National Tier 1 minimum ratio (if different from Basel III minimum) n/a 71 National total capital minimum ratio (if different from Basel III minimum) n/a 5

6 Table 1: Common Disclosure Composition of Capital (continued) Common Equity Tier 1 capital: instruments and reserves 30Jun13 $ Amount below thresholds for deductions (not riskweighted) 72 Nonsignificant investments in the capital of other financial entities 73 Significant investments in the ordinary shares of financial entities 74 Mortgage servicing rights (net of related tax liability) 75 Deferred tax assets arising from temporary differences (net of related tax liability) Reference to Reconciliation Applicable caps on the inclusion of provisions in Tier 2 76 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to 895,997 (d) standardised approach (prior to application of cap) 77 Cap on inclusion of provisions in Tier 2 under standardised approach 3,511, Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal n/a ratingsbased approach (prior to application of cap) 79 Cap for inclusion of provisions in Tier 2 under internal ratingsbased approach n/a Capital instruments subject to phaseout arrangements ( only applicable between 1 Jan 2018 and 1 Jan 2022) 80 Current cap on CET1 instruments subject to phase out arrangements 1,900, Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities 82 Current cap on AT1 instruments subject to phase out arrangements 83 Amount excluded from AT1 instruments due to cap (excess over cap after redemptions and maturities) 84 Current cap on T2 instruments subject to phase out arrangements 866, Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) 6

7 Regulatory Capital reconciliation The following table discloses the consolidated Balance Sheet of SGE Credit Union Limited including the consolidated entity SGE Funding Trust No.1 as published in its audited financial statements. Balance Sheet per published Audited Financial Statements Adjustments Balance Sheet under Regulatory Scope of Consolidation Reference 30Jun13 30Jun13 30Jun13 $ $ $ ASSETS Cash and deposits at call 20,962,493 20,962,493 Due from other financial institutions 225,791, ,791,136 Trade and other receivables 4,307,403 (290,475) 4,016,928 (a) Derivative Finanacial Instrument Banking Book 82,030 82,030 (b) Loans and advances 391,940,945 (82,030) 391,858,915 (b) Less: Provision (300,274) (22,608) (322,882) (c) Less: General Reserve for Credit Losses (895,997) (895,997) (d) Capital Debt Raising/ Funding Costs 30,670 30,670 (e) Financial assets availableforsale 44,713 44,713 Loss reserve loan 200, ,000 (j) Property, plant and equipment 12,202,660 12,202,660 Intangible assets 984, ,325 (g) Deferred tax assets 552, ,084 (h) Total Assets 656,685,485 (1,178,410) 655,507,075 LIABILITIES Deposits 573,085, ,085,804 Trade and other payables 7,935,659 (290,475) 7,645,184 (a) Subordinated debt 982,347 17,653 1,000,000 (e) Derivative liabilities 73,538 73,538 Current tax liabilities 260, ,267 Deferred tax liabilities 7,546 7,546 (h) Other borrowings Provisions 1,224,917 1,224,917 Total Liabilities 583,570,078 (272,822) 583,297,256 Net Assets 73,115,407 (905,588) 72,209,819 EQUITY Preference shares 1,986,983 13,017 2,000,000 (e) Redeemable member shares 105, ,678 (i) Retained earnings 71,022,746 (22,608) 71,000,138 (c) Transfer of General Reserve for Credit Losses (895,997) (895,997) (d) Total Equity 73,115,407 (905,588) 72,209,819 (f) 7

8 Table 2: Main features of capital instruments The table below summarise the main features of all financial instruments included in regulatory capital. Main features Instrument 1 Instrument 2 1 Issuer Australian Mutual T1 Capital Funding Australian Mutual Investment Trust Trust No.1 2 Unique identifier (eg CUSIP, ISIN or Bloomberg identifier for private placement) N/A N/A 3 Governing law(s) of the instrument NSW, Australia NSW, Australia Regulatory treatment 4 Transitional Basel III rules Additional Tier 1 Capital Tier 2 Capital 5 Posttransitional Basel III rules Ineligible Ineligible 6 Eligible at solo/group/group & solo N/A N/A 7 Instrument type (ordinary shares/preference shares/subordinated notes/other) Preference Shares Subordinated Debt 8 Amount recognised in Regulatory Capital (Currency in $m at most recent reporting date) $1.9m $0.9m 9 Par value of instrument $2.0m $1.0m 10 Accounting classification Preference Shares Subordinated Debt 11 Original date of issuance 26Jun06 09Nov12 12 Perpetual or dated Perpetual Dated 13 Original maturity date N/A 09Nov22 14 Issuer call subject to prior supervisory approval Yes Yes 15 Optional call date, contingent call dates and redemption amount On any Dividend payment date following the 10th anniversary. Redemption of all, or some of the debt with a minimum and mutliples of $100,000 On any Interest payment date following the 5th anniversary. Redemption of all, or some of the debt with a minimum and mutliples of $100, Subsequent call dates, if applicable As outlined above As outlined above Coupons/dividends 17 Fixed or floating dividend/coupon Floating Floating 18 Coupon rate and any related index AUD BBSW bps AUD BBSW bps 19 Existence of a dividend stopper N/A N/A 20 Fully discretionary, partially discretionary or mandatory Fully Discretionary Mandatory 21 Existence of step up or other incentive to redeem 10th Anniversary + 1% No 22 Noncumulative or cumulative Non Cumulative Cumulative 23 Convertible or nonconvertible Non Convertible Non Convertible 24 If convertible, conversion trigger (s) N/A N/A 25 If convertible, fully or partially N/A N/A 26 If convertible, conversion rate N/A N/A 27 If convertible, mandatory or optional conversion N/A N/A 28 If convertible, specify instrument type convertible into N/A N/A 29 If convertible, specify issuer of instrument it converts into N/A N/A 30 Writedown feature No No 31 If writedown, writedown trigger(s) N/A N/A 32 If writedown, full or partial N/A N/A 33 If writedown, permanent or temporary N/A N/A 34 If temporary write down, description of wind up mechanism N/A N/A 35 Position in subordination hieraracy in liquidation (specify instrument type immendiately senior to instrument) Member Shares Deposits 36 Non compliant transitioned features Yes Yes 37 If yes, specify non compliant features No write down or convertible feature No write down or convertible feature 8

9 Table 3: Capital Adequacy The risk weighted assets held as at the end of the quarter ended 30 September 2013 is as follows: Gross Assets Risk Weighted Assets $ $ Capital requirements (in terms of riskweighted assets by portfolio) for: Credit Risk Residential mortgages 390,399, ,614,913 Other retail loans 47,001,331 29,792,208 Corporate loans 1,874,263 1,874,263 Funds deposited with ADI's 263,575,774 77,650,151 Government Securitisation Fixed Assets 12,186,621 12,186,621 Other Assets 27,612,305 6,257,728 Total Credit Risk 742,649, ,375,884 Market Risk Operational Risk 38,548,085 Total assessed risk 310,923,969 Common Equity Tier % Tier % Total riskweighted capital ratio 23.42% The risk weighted assets held as at the end of the quarter ended 30 June 2013 is as follows: Gross Assets Risk Weighted Assets $ $ Capital requirements (in terms of riskweighted assets by portfolio) for: Credit Risk Residential mortgages 381,319, ,441,969 Other retail loans 51,255,469 30,716,677 Corporate loans 863, ,935 Funds deposited with ADI's 263,107,703 92,359,950 Government Securitisation Fixed Assets 12,035,360 12,035,360 Other Assets 23,475,604 2,502,018 Total Credit Risk 732,057, ,919,909 Market Risk Operational Risk 38,587,063 Total assessed risk 319,506,972 Common Equity Tier % Tier % Total riskweighted capital ratio 22.57% 9

10 Table 3: Capital Adequacy (continued) The risk weighted assets held as at the end of the quarter ended 31 March 2013 is as follows: Gross Assets Risk Weighted Assets $ $ Capital requirements (in terms of riskweighted assets by portfolio) for: Credit Risk Residential mortgages 377,700, ,051,705 Other retail loans 54,312,099 32,157,166 Corporate loans 18,433 18,433 Funds deposited with ADI's 226,140,889 74,248,424 Government Securitisation Fixed Assets 11,119,661 11,119,661 Other Assets 24,233,024 4,418,003 Total Credit Risk 693,524, ,013,392 Market Risk Operational Risk 35,799,150 Total assessed risk 296,812,542 Common Equity Tier % Tier % Total riskweighted capital ratio 23.85% 10

11 Table 4: Credit Risk Quarterly Disclosure from 01 July September 2013 Credit Risk Gross Amount Average Amount Value of loans that are Impaired / Past Due Loan Loss Provisioning Bad Debts Writtenoff $ $ $ $ $ Claims secured by residential mortgage 390,399, ,859,415 4,354,116 59,137 Other retail loans 47,001,331 49,128, , ,665 21,329 Corporate Bank Governement All Other Total by portfolio 437,400, ,987,815 4,676, ,802 21,329 Corporate loans 1,874,263 1,369,099 Funds deposited with ADI's 263,575, ,341,739 Government Commitments Other nonmarket offbalance sheet exposures 21,354,577 21,164,082 Debt securities Overthecounter derivatives Fixed assets 12,186,621 12,110,991 Other assets 6,257,728 4,379,873 Total Exposures 742,649, ,353,598 4,676, ,802 21,329 General reserve for credit losses $ 912,841 Quarterly Disclosure from 01 April June 2013 Credit Risk Gross Amount Average Amount $ $ $ $ $ Claims secured by residential mortgage 381,319, ,509,954 7,116,125 50,031 Other retail loans 51,255,469 52,783, , ,851 60,358 Corporate Bank Governement All Other Total by portfolio 432,575, ,293,738 7,862, ,882 60,358 Corporate loans 863, ,184 Funds deposited with ADI's 263,107, ,624,296 Government Commitments Other nonmarket offbalance sheet exposures 20,973,586 20,394,303 Debt securities Overthecounter derivatives Fixed assets 12,035,360 11,577,511 Other assets 2,502,018 3,460,011 Total Exposures 732,057, ,791,043 7,862, ,882 60,358 General reserve for credit losses $ 895,997 Value of loans that are Impaired / Past Due Loan Loss Provisioning Bad Debts Writtenoff 11

12 Table 4: Credit Risk (continued) Quarterly Disclosure from 01 January March 2013 Average Value of Loan Loss Bad Debts Credit Risk Gross Amount Amount loans that Provisioning Writtenoff $ $ $ $ $ Residential mortgages 377,700, ,773,205 3,855,908 50,265 Other retail loans 54,312,099 49,861,447 1,111, ,626 57,894 Corporate Bank Governement All Other Total Loans 432,012, ,634,652 4,966, ,891 57,894 Corporate loans 18,433 18,377 Funds deposited with ADI's 226,140, ,767,349 Government Commitments Other nonmarket offbalance sheet exposures 19,815,021 19,544,926 Debt securities Overthecounter derivatives Fixed assets 11,119,661 11,295,368 Other assets 4,418,003 6,118,936 Total Exposures 693,524, ,379,608 4,966, ,891 57,894 General reserve for credit losses $ 881,595 12

13 Table 5 Securitisation Quarterly Disclosure from 01 July September 2013 Securitisation Exposure Residential Mortgages Securitised under Internal Securitisation arrangement this quarter Residential Mortgages Exposure held under Internal Securitisation arrangement at the end of this quarter Gross Amount $ $ NIL $42,848,881 Quarterly Disclosure from 01 April June 2013 Securitisation Exposure Residential Mortgages Securitised under Internal Securitisation arrangement this quarter Residential Mortgages Exposure held under Internal Securitisation arrangement at the end of this quarter Gross Amount $ $ NIL $46,697,355 Quarterly Disclosure from 01 January March 2013 Securitisation Exposure Gross Amount $ Residential Mortgages Securitised under Internal Securitisation arrangement this quarter $52,267,925 Residential Mortgages Exposure held under Internal Securitisation arrangement at the end of this quarter $51,671,491 13

14 Remuneration Report The lodgment date for this annual disclosure is within three months of lodgment of the SGE s annual financial report. This section will be updated as the disclosures become due. 14