Common Disclosure Template - Capital

Transcription

1 Common Disclosure Template - Capital ABN: Figures are reported on a Level 2 basis Greater Bank is using the post 1 January 2018 common disclosure template because we are fully applying the Basel III regulatory adjustments as implemented by APRA Year Ended 30 June 2017 Year Ended 30 June 2016 Common Equity Tier 1 Capital: instruments and reserves $M's $M's 2 Retained Earnings Accumulated other comprehensive income (and other reserves) Common Equity Tier 1 capital before regulatory adjustments Common Equity Tier 1 Capital: regulatory adjustments 11 Cash-flow hedge reserve (0.5) National specific regulatory adjustments c of which: deferred fee income (2.1) (2.2) 26d of which: equity investments in financial institutions e of which: deferred tax assets f of which: capitalised expenses g of which: investments in commercial (non-financial) entities that are deducted under APRA prudential requirements Total Regulatory adjustments to Common Equity Tier Common Equity Tier 1 Capital (CET1) Tier 1 Capital (T1) Tier 2 Capital: instruments and provisions 50 Provisions Tier 2 Capital before regulatory adjustments Tier 2 Capital (T2) Total Capital (TC) Total risk-weighted assets based on APRA standards 2, ,453.1 Capital Ratios and Buffers 61 Common Equity Tier 1 (as a percentage of risk-weighted assets) 16.85% 17.48% 62 Tier 1 (as a percentage of risk-weighted assets) 16.85% 17.48% 63 Total Capital (as a percentage of risk-weighted assets) 17.25% 17.89% 64 Buffer requirement (minimum CET1 requirement of 4.5% plus capital conservation buffer of 2.5% plus any countercyclical 7.00% 7.00% buffer requirements expressed as a percentage of risk-weighted assets) 65 of which: capital conservation buffer requirement 2.50% 2.50% 66 of which: ADI-specific countercylical buffer requirements 0.00% 0.00% 68 Common Equity Tier 1 available to meet buffers (as a percentage of risk-weighted assets) 16.85% 17.48%

2 ABN: Figures are reported on a Level 2 basis Capital Reconciliation For the Year Ended 30 June 2017 Greater Bank Limited is the head of the Level 2 consolidated group to which this Prudential Standard applies Published financial statement As at 30-Jun-17 Regulatory scope of Consolidation As at 30-Jun-17 Reference to Common Disclosure Template Assets Cash and cash equivalents 226, ,582 Investment securities 1,112,673 1,221,611 of which: equity investments in financial institutions d Current tax asset 0 0 Other receivables 3,051 (5,689) Derivative financial instruments Loans and advances 4,895,476 4,856,379 of which: credit loss reserve 10, of which: deferred fee income (2,067) 26c of which: capitalised expenses 3,647 26f Other financial assets of which: equity investments in financial institutions d of which: investments in commercial (non-financial) entities that 0 26g are deducted under APRA prudential requirements Deferred tax assets 3,718 6,907 26e Property, plant and equipment 31,158 37,197 Investment properties 6,039 0 Intangible assets 6,797 6,797 26f Total Assets 6,286,212 6,250,359 Liabilities Payables and other liabilities 11,453 41,329 Unearned Income 1,307 1,307 Deposits 5,375,917 5,361,278 of which: capitalised expenses (139) 26f Current tax liabilities 195 3,384 of which: deferred tax liabilities 3,188 26e Derivative financial instruments 1,349 1,354 Other financial liabilities 404, ,627 Provisions 9,926 9,926 Total Liabilities 5,804,979 5,783,205 NET ASSETS 481, ,154 Equity Reserves 32,090 18,011 3* of which: cash flow hedge reserve (520) 11 Retained profits 449, ,143 2 Non-controlling interest Total Equity 481, ,154 * Reserve reconciliation to 'Common disclosure template' Reserves 18,011 Less fair value through other comprehensive income reserve 0 Less discounting of asset revaluation reserve 0 Reserves as per 'common disclosure template' 18,011

3 Capital Reconciliation (cont) ABN: Figures are reported on a Level 2 basis The following entities are included within the accounting scope of consolidation, but excluded from the regulatory scope of consolidation under the securitisation deconsolidation principals that remove assets, liabilities, revenues and expenses of special purpose vehicles (SPV's) that meet the requirements of Prudential Standard APS 120 Securitisation. Entity Assets Liabilities GBS Receivables Trust No. 4 30,725 30,725 The above Trust's are special purpose vehicles for securitised funding programs. They are established by deed and domiciled in Australia.

4 ABN: Figures are reported on a Level 2 basis Capital Reconciliation For the Year Ended 30 June 2016 Greater Bank Limited is the head of the Level 2 consolidated group to which this Prudential Standard applies Published financial statement As at 30-Jun-16 Regulatory scope of Consolidation As at 30-Jun-16 Reference to Common Disclosure Template Assets Cash and cash equivalents 173,498 99,401 Investment securities 951,477 1,025,984 of which: equity investments in financial institutions d Current tax asset 0 0 Other receivables 1,625 3,412 Derivative financial instruments Loans and advances 4,544,409 4,490,664 of which: credit loss reserve 10, of which: deferred fee income (2,152) 26c of which: capitalised expenses 3,412 26f Other financial assets of which: equity investments in financial institutions d of which: investments in commercial (non-financial) entities that 0 26g are deducted under APRA prudential requirements Deferred tax assets 3,640 6,520 26e Property, plant and equipment 28,624 28,624 Investment properties 5,656 5,656 Intangible assets 5,374 5,374 26f Total Assets 5,715,315 5,666,608 Liabilities Payables and other liabilities 9,647 11,823 Unearned Income 2, Deposits 4,911,888 4,896,918 of which: capitalised expenses (47) 26f Current tax liabilities 431 3,311 of which: deferred tax liabilities 2,880 26e Derivative financial instruments Other financial liabilities 327, ,933 Provisions 9,465 9,465 Total Liabilities 5,262,529 5,226,377 NET ASSETS 452, ,231 Equity Reserves 30,900 18,345 3* of which: cash flow hedge reserve Retained profits 421, ,886 2 Non-controlling interest Total Equity 452, ,231 * Reserve reconciliation to 'Common disclosure template' Reserves 18,345 Less fair value through other comprehensive income reserve 0 Less discounting of asset revaluation reserve 0 Reserves as per 'common disclosure template' 18,345

5 Capital Reconciliation (cont) ABN: Figures are reported on a Level 2 basis The following entities are included within the accounting scope of consolidation, but excluded from the regulatory scope of consolidation under the securitisation deconsolidation principals that remove assets, liabilities, revenues and expenses of special purpose vehicles (SPV's) that meet the requirements of Prudential Standard APS 120 Securitisation. Entity Assets Liabilities GBS Receivables Trust No. 4 46,731 46,731 The above Trust's are special purpose vehicles for securitised funding programs. They are established by deed and domiciled in Australia.

6 Risk Exposures and Assessment ABN: Figures are reported on a Level 2 basis Capital Adequacy 6 months to 31 Dec months to 30 Sep 2017 Capital Requirement (in terms of risk weighted assets): Claims Secured against Residential Mortgages 1,774,397 1,716,873 Other Retail 205, ,204 Investments in ADI's 350, ,006 Securitisation 49,141 52,169 Other 75,659 91,516 2,455,161 2,438,767 Capital Requirement for Operational Risk 339, ,942 TOTAL CAPITAL REQUIREMENT 2,795,041 2,762,709 Common Equity Tier 1 Ratio 16.99% 16.83% Tier 1 Ratio 16.99% 16.83% Total Capital Ratio 17.39% 17.22%

7 Risk Exposures and Assessment (cont) For the 6 Months Ended 31 Dec 2017 ABN: Figures are reported on a Level 2 basis Credit Risk Gross Credit Risk Exposures Average Gross Credit Risk Exposures - over the period Loans and Advances Claims Secured by Residential Mortgages 4,908,225 4,776,913 Other Loans 205, ,139 Other Liquidity Investments (including cash) 1,113,257 1,147,699 Other On-balance Sheet Assets 39,999 42,550 Off-Balance Sheet Assets 79,644 80,377 Total Credit Risk Exposures (excluding equities & securitisation) 6,346,918 6,249,677 Specific Outstanding Balance Provision Impaired Facilities - Loans and advances 6,913 4,094 - Other - - Past Due Facilities - Loans and advances 2, Other - - Bad & Doubtful Debt Expense Expense Net movement in Specific Provision - Loans and advances (368) - Other - Bad Debt write offs directly to profit and loss - Loans and advances Other - Total Bad & Doubtful Debt Expense for the Period (220) General Reserve for Credit Losses 11,133

8 Risk Exposures and Assessment (cont) For the 3 Months Ended 30 Sep 2017 ABN: Figures are reported on a Level 2 basis Credit Risk Gross Credit Risk Exposures Average Gross Credit Risk Exposures - over the period Loans and Advances Claims Secured by Residential Mortgages 4,750,354 4,711,256 Other Loans 209, ,311 Other Liquidity Investments (including cash) 1,190,779 1,164,920 Other On-balance Sheet Assets 44,128 43,825 Off-Balance Sheet Assets 66,907 80,743 Total Credit Risk Exposures (excluding equities & securitisation) 6,261,371 6,201,056 Specific Outstanding Balance Provision Impaired Facilities - Loans and advances 7,405 4,298 - Other - - Past Due Facilities - Loans and advances 1, Other - - Bad & Doubtful Debt Expense Expense Net movement in Specific Provision - Loans and advances (164) - Other - Bad Debt write offs directly to profit and loss - Loans and advances 86 - Other - Total Bad & Doubtful Debt Expense for the Period (79) General Reserve for Credit Losses 10,621

9 ABN: Figures are reported on a Level 2 basis Risk Exposures and Assessment (cont) For the 6 Months Ended 31 Dec 2017 Securitisation Exposures (a) Investment Securities Balance Gain/(Loss) on Sale Greater Bank Group Originated: Securities held in Asset Backed Commercial Paper (ABCP) - Housing 0 0 Securities held in ABCP - Other 0 0 Securities held in Residential Mortgage Backed Securities (RMBS) 731,000 0 Total Greater Bank Group Originated Securities 731,000 0 Non Greater Bank Group Originated: Securities held in Asset Backed Commercial Paper (ABCP) - Housing 0 0 Securities held in ABCP - Other 0 0 Securities held in Commercial Mortgage Backed Securities (CMBS) 10,042 0 Securities held in Residential Mortgage Backed Securities (RMBS) 234,880 0 Total Non Greater Bank Group Originated Securities 244,922 0 Total Investment Securities 975,922 0 (b) Securitised Assets - Greater Bank Group Originated * On Balance sheet (lending): Housing Loans 1,048,067 Other 0 Total On Balance 1,048,067 Notional Amount Off Balance Sheet: Liquidity Facilities 0 Funding Facilities 109,010 Swaps 1,048,067 Total Off Balance 1,157,077 Total Securitised Assets not transferred 2,205,144 Balance Lending: Housing Loans 0 Other 0 Total Lending 0 Notional Amount Other Facilities: Liquidity Facilities 0 Funding Facilities 0 Swaps 0 Total Other Facilities 0 Total Securitised Assets transferred 0 Total Securitised Assets 2,205,144 * The Greater Bank Group has no Securitised Assets that are not Greater Bank Group Originated

10 ABN: Figures are reported on a Level 2 basis Risk Exposures and Assessment (cont) For the 3 Months Ended 30 Sep 2017 Securitisation Exposures Balance Gain/(Loss) on Sale (a) Investment Securities Greater Bank Group Originated: Securities held in Asset Backed Commercial Paper (ABCP) - Housing 0 0 Securities held in ABCP - Other 0 0 Securities held in Residential Mortgage Backed Securities (RMBS) 734,068 0 Total Greater Bank Group Originated Securities 734,068 0 Non Greater Bank Group Originated: Securities held in Asset Backed Commercial Paper (ABCP) - Housing 0 0 Securities held in ABCP - Other 0 0 Securities held in Commercial Mortgage Backed Securities (CMBS) 11,222 0 Securities held in Residential Mortgage Backed Securities (RMBS) 235,100 0 Total Non Greater Bank Group Originated Securities 246,322 0 Total Investment Securities 980,390 0 (b) Securitised Assets - Greater Bank Group Originated * On Balance sheet (lending): Housing Loans 1,043,232 Other 0 Total On Balance 1,043,232 Notional Amount Off Balance Sheet: Liquidity Facilities 0 Funding Facilities 104,071 Swaps 1,043,232 Total Off Balance 1,147,303 Total Securitised Assets not transferred 2,190,535 Balance Lending: Housing Loans 25,796 Other 0 Total Lending 25,796 Notional Amount Other Facilities: Liquidity Facilities 2,185 Funding Facilities 9,786 Swaps 25,796 Total Other Facilities 37,767 Total Securitised Assets transferred 63,562 Total Securitised Assets 2,254,097 * The Greater Bank Group has no Securitised Assets that are not Greater Bank Group Originated

11 Greater Bank Limited APS330 Remuneration Disclosure Year Ended 30 June

12 APS330 Remuneration Disclosure Year Ended 30 June 2017 Disclosure Requirements Preparation of the following remuneration disclosure has been aligned with the Australian Prudential Regulatory Authority s (APRA) prudential standard APS330 Public Disclosure for the financial year ended 30 June The APRA prudential disclosures require that all Authorised Deposit-taking Institutions (ADI s) meet the minimum requirements for public disclosure of qualitative and quantitative information of their remuneration practices. For the purpose of this disclosure only, the following positions are being considered: Senior Managers Executive Management Team (7); Company Secretary; Head of Lending Services; Head of Internal Audit; and Head of Operational Risk and Compliance. Material Risk Takers Head of Marketing and Customer Experience; and Head of Retail. Qualitative Disclosures 1. Remuneration Governance The Board are responsible for remuneration governance and has established a sub-committee, the Remuneration Committee, primarily for the purpose of: Reviewing and recommending to the Board, levels of remuneration for Greater Bank s employees and non-executive directors; and Reviewing and making recommendations to the Board on Greater Bank s Remuneration Strategy and Remuneration Policy. The Remuneration Committee comprises four (4) independent non-executive Directors who are appointed by the Board. The responsibilities of the Remuneration Committee are: Regular review of, and making recommendations to, the Board on Greater Bank s Remuneration Strategy; Periodically reviewing, and making recommendations to the Board on, Greater Bank s Remuneration Policy, including assessment of the Remuneration Policy s effectiveness and compliance with APRA Prudential Standard CPS 510 (Governance); Reviewing and making annual recommendations to the Board on Total Remuneration (including the components of the Total Remuneration) of: i. the Chief Executive Officer; 2

13 APS330 Remuneration Disclosure Year Ended 30 June 2017 ii. direct reports of the Chief Executive Officer and other persons including Senior Managers and Material Risk Takers; iii. other persons whose activities may, in the Committee s opinion, affect the financial soundness of Greater Bank; iv. other persons covered by Greater Bank s Remuneration Policy; and v. any other person specified by APRA; Reviewing recommendations from the Chief Executive Officer on the annual salary reviews of, and bonus payments to employees, other than those covered in the above point, and making recommendations to the Board concerning any proposed increases; Reviewing recommendations from the Chief Executive Officer on discussions taking place, or that will in the future take place, concerning Greater Bank s Enterprise Agreement with employees and making recommendations to the Board from those discussions and any proposed changes to the Enterprise Agreement; Assisting the Board in establishing an appropriate remuneration level for non-executive Directors to be recommended for approval by members at the general meeting; and Providing other advice and support to the Board concerning the remuneration of Greater Bank s employees and non-executive Directors. Total Remuneration means the total value of the fixed and variable components of a person s remuneration, including (without limitation) base salary, superannuation contributions, allowances, short, medium and long term incentives and any non-cash components of remuneration. The last twelve months have been significant in terms of remuneration outcomes for Greater Bank where processes and learnings have been embedded, incentive plans have been reviewed, and interest based bargaining occurred for the establishment of the 2017 Greater Bank Enterprise Agreement, while supporting the business and our people to understand the need for change. Utilising insights from the Mercer external consultancy engagement in FY 2015/16, Greater Bank has collaboratively worked with the business to determine the appropriate approach to introduce and implement a contemporary remuneration strategy and framework. 2. Remuneration Policy and Framework The Greater Bank remuneration policy is based on a total reward approach which enables an equitable and competitive approach to remuneration and reward through market competitiveness, encouraging prudent behaviours and satisfying regulatory obligations. The remuneration framework guides the provision of contemporary remuneration principles, strategy and incentive governance. Essentially, the objectives of the remuneration policy are to: Define the remuneration framework, total reward approach, and roles and responsibilities to facilitate the delivery of financially sound long term results for Greater Bank; Align remuneration activities with strategic objectives; Attract, retain and motivate high performing employees to achieve strategic objectives; Differentiate reward according to performance; Actively encourage behaviours that demonstrate the corporate values and are aligned to the organisational risk appetite; Encourage prudent risk taking and alignment with our corporate values to ensure the financial soundness of Greater Bank; and 3

14 APS330 Remuneration Disclosure Year Ended 30 June 2017 Ensure consistency in the application of remuneration and reward principles. The guiding principles of the remuneration strategy, as outlined in the remuneration policy include: Business Alignment: Support the achievement of organisational strategic objectives, and to reinforce demonstrated behaviours that reflect our corporate values; Market Competitiveness: Regular market benchmarking is conducted to ensure reward practices are competitive within industry and employers with whom we compete to recruit and retain top talent to drive business outcomes; Pay Equity: Consistent and transparent position evaluation, coupled with regular pay equity analysis, to ensure that employees receive equal remuneration for positions of the same or comparable value; Reward for Performance: To differentiate reward according to performance with a variable reward system designed to drive both organisational and individual performance; Classification Framework: A structured and consistent position classification framework that is reflective of the organisational structure is applied to support the delivery of rewards and other human resource initiatives; Workforce Segmentation: The workforce being segmented to ensure reward strategies are applied to optimise investment in critical or strategic talent; Career: To support employees to develop their career; and Communication: Articulation of the total reward approach and the principles of reward programs for all employees to empower managers to recognise performance and advocate the total reward approach. The above remuneration objectives and guiding principles ensure Greater Bank meets the requirement of Risk and Compliance employees are remunerated independently of the businesses they oversee. This is conducted through the Remuneration Committee review and approval process, and informed by benchmarking data taken from several independent surveys. Through a robust annual budget process, salary budgets are developed based on factors including resourcing requirements for the achievement of strategic objectives, economic indicators, market movements and the expected performance of Greater Bank. These factors are measured in respect of: Internal position evaluations and remuneration framework; Benchmarking with independent industry remuneration surveys; and Review and benchmarking of similar positions and/or ADI Enterprise Agreements. 4

15 APS330 Remuneration Disclosure Year Ended 30 June Remuneration Structure Remuneration is comprised of: Base Salary: Annual salary excluding allowances or additional payments; Superannuation: superannuation contribution amount aligned with the applicable statutory superannuation guarantee contribution amount; Total Fixed Remuneration (TFR): Base salary plus the value of all cash (e.g. superannuation, allowances) and non-cash benefits (e.g. motor vehicles) plus the cost of Fringe Benefits Tax (FBT); Short-Term Incentives: Variable reward opportunities designed to recognise achievements measured over a specific performance period (e.g. 12 months); and Total Remuneration: TFR plus actual short-term incentives. 4. Incentive Plans Greater Bank may pay an incentive to employees at its discretion based on organisation and individual performance, and will determine: Whether an employee is entitled to an incentive; and The amount of any incentive. Greater Bank utilised the following incentive plans during FY 2016/17: Executive Incentive Plan; Senior Manager Incentive Plan; Graded and Non-Graded Incentive Plans; and Sales Manager Incentive Plan. The objective of each incentive plan is to recognise and reward employees who contribute to the successful outcomes of Greater Bank, and to support differentiation based on performance. The annual performance review process informs the incentive outcomes for employees. Following the completion of performance reviews for all employees for FY 2016/17, divisional calibration sessions occurred. A separate Executive calibration session for senior managers was also facilitated in order to ensure consistency in performance ratings and incentive allocation for employees. The maximum value of incentive award is adjusted annually based on Greater Bank s financial performance. The Board has the discretion to defer or adjust the amount of any payment downwards, including to zero, where deemed appropriate in the context of individual or corporate KPI outcomes. 3.1 Executive Incentive Plan (EIP) Greater Bank has a short term incentive plan for the Executive. The Executive Incentive Plan (EIP) is a significant component of the remuneration framework at Greater Bank. The EIP provides reward, aligned with APRA guidelines, for the achievement of both corporate and individual outcomes. The Board set corporate key performance indicators (KPIs) each financial year, which forms a significant component of the incentive payment. Individual goals are set annually for each 5

16 APS330 Remuneration Disclosure Year Ended 30 June 2017 Executive Manager, based on their operational and strategic responsibilities, with individual performance measured at the end of the financial year. Under the EIP, the Board may reduce or cancel payments, including deferred payments, where it becomes apparent that the financial soundness of Greater Bank has been, or is likely to be, compromised. This would include where: A loss has been declared, or may arise; Prudential capital requirements have been breached; There has been a material risk management breach; There has been an unexpected financial loss; Greater Bank has suffered serious reputational damage; or There has been a material regulatory non-compliance. Following finalisation and external auditor sign-off on the financial year accounts, the outcomes achieved against the KPIs and goals will be measured, with any incentive awarded under the EIP determined by the Remuneration Committee and approved by the Board. The amount of the incentive payment for the financial year will, subject to the EIP terms, be: 2/3 in cash (less applicable taxes) when the amount of the incentive payment is determined; and 1/3 in cash (less applicable taxes) in the second financial year after the financial year for which the incentive payment was assessed and determined (deferred EIP amount). 3.2 Senior Manager Incentive Plan (SMIP) Senior Managers other than those under the Executive Incentive Plan, have their performance linked to their annual performance review in the financial year. The purpose of the SMIP is differentiating and rewarding senior managers based on their contribution to achieving the outcomes for their Unit, Division and Greater Bank. The SMIP provides reward, aligned with APRA guidelines, for the achievement of both corporate KPIs as determined by the Board, and individual performance against goals. Individual goals are set annually for each Senior Manager, based on their operational and strategic responsibilities. The SMIP incentive opportunity is a percentage of TFR and aligned to the classification of the Senior Managers position. 3.4 Graded Incentive Plan The Graded Incentive Plan encompasses all graded employees whose employment conditions are covered by the Greater Bank Enterprise Agreement, with an incentive opportunity as a percentage of TFR. The annual performance review results inform the incentive outcomes for employees. The incentive pool is determined by the profit after income tax expense, excluding underlying items determined by the Board, of Greater Bank. The incentive percentage calculation for each graded employee will be based on ordinary time earnings during the applicable financial year, and is aligned with APRA guidelines. 6

17 APS330 Remuneration Disclosure Year Ended 30 June Non-Graded Incentive Plan The Non-Graded Incentive Plan encompasses all non-graded employees, excluding employees eligible for other incentive plans. The Non Graded Incentive Plan has a maximum incentive opportunity as a percentage of TFR based on the classification of the employees position. The incentive percentage available for employees is determined annually based on the financial performance of Greater Bank, aligned with APRA guidelines, and individual goal outcomes. The annual performance review results inform the incentive outcomes for employees. 3.6 Sales Manager Incentive Plan The Sales Manager Incentive Plan provides opportunity for branch managers and lending managers to be rewarded for achievement and out-performance against budget targets. Qualitative Disclosures During the year, the Remuneration Committee, which is a sub-committee of the Board of Greater Bank Limited, met four (4) times. Remuneration of the Board Remuneration Committee FY 2016/2017 $ Members are not remunerated specifically for their appointment to the Committee but as their appointment as directors of Greater Bank. 504,203 The table below presents the Senior Managers who received variable remuneration, guaranteed bonuses, sign-on awards or severance payments during the financial year. Variable remuneration, guaranteed bonuses, sign-on award and severance payments FY 2016/2017 Number of Employees Total ($) Variable remuneration award discretionary bonus ,271 Guaranteed bonus Nil Nil Sign-on award Nil Nil Severance Payment (redundancy/severance paid as lump sum on termination of employment) Nil Nil Total ,271 The table below presents the movement in deferred remuneration: Deferred remuneration Cash Outstanding at 30 June 2017($) Shares Other Total Cash Shares Paid during the year ($) Sharelinked Sharelinked Other Total Deferred remuneration preadjustment 530, , , ,585 7

18 APS330 Remuneration Disclosure Year Ended 30 June 2017 Adjustmentsimplicit Markto-market value of shares Adjustmentsexplicit Clawbacks Deferred remuneration Postadjustment , , , ,585 The table below presents total value of remuneration awards for Senior Managers: Total value of Unrestricted Deferred remuneration awards for the current financial year $ $ Total $ Fixed Remuneration Cash-based $2,492,152 - $2,492,152 Shares and share-linked instruments Other $185,029 - $185,029 $2,677,181 - $2,677,181 Variable Remuneration Cash-based $584,938 $233,333 $818,271 Shares and share-linked instruments Other <> $584,938 $233,333 $818,271 Total $3,262,119 $233,333 $3,495,452 The table below presents total value of remuneration awards for material risk takers: Total value of remuneration Unrestricted Deferred awards for the current financial year $ $ Total $ Fixed Remuneration- Cash-based 521, ,902 Shares and share-linked instruments Other 2,475-2,475 8

19 APS330 Remuneration Disclosure Year Ended 30 June , ,377 Variable Remuneration Cash-based 69,530-69,530 Shares and share-linked instruments Other <> 69,530 69,530 Total 593, ,907 9

20 APRA Remuneration Disclosure Requirements Year Ended 30 June 2016 Qualitative Disclosures The following remuneration disclosures have been prepared in line with the prudential standard APS330 Public Disclosure and Board approved policy. The Australian Prudential Regulatory Authority s (APRA) prudential disclosures require that all Authorised Deposit-taking Institutions (ADI s) meet the minimum requirements for public disclosure of qualitative and quantitative information of their remuneration practices. The Board of Greater Bank Limited are responsible for remuneration governance and has established a sub-committee (Remuneration Committee) primarily for the purpose of recommending to the Board levels of remuneration for Greater Bank s employees and non-executive directors. The Remuneration Committee comprises four (4) independent non-executive Directors who are appointed by the Board. The responsibilities of the Remuneration Committee are to: Review and make recommendations to the Board on the total remuneration of the Chief Executive Officer, direct reports of the Chief Executive Officer, other persons whose activities may in the Committee s opinion affect the financial soundness of Greater Bank, and any other person specified by APRA. Total remuneration is the total value of the fixed and variable cash components (including any incentives), contributions to superannuation, and any non-cash components of remuneration. Review recommendations from the Chief Executive Officer on the annual salary review and bonus payments of non-graded employees other than those covered above and make recommendations to the Board on any proposed increases. Review the recommendations from the Chief Executive Officer on negotiations of Greater Bank s Enterprise Agreement with employees and make recommendations to the Board on any proposed agreement. Assist the Board in establishing an appropriate remuneration level for nonexecutive directors to be recommended to members for approval at the annual general meeting. Periodically review and make recommendations to the Board on the Remuneration Policy required under APRA Prudential Standard CPS510.

21 For the purposes of this Disclosure only, the following positions are considered Senior Managers as defined under APS330: All members of the Executive team (6); Head of Internal Audit; and Manager Lending Services. Greater Bank does not consider it has any persons that meet the definition of material risk takers under APS330. Greater Bank has developed a Remuneration Policy consistent with the requirements of CPS510 Governance. The objectives of the Remuneration Policy are to ensure that: Remuneration is market competitive. Remuneration is commensurate with performance and the results delivered. Remuneration is aligned with Greater Bank s long term financial soundness. Remuneration is consistent with Greater Bank s risk appetite and does not encourage risk-taking that is contrary to its sound and prudential management. Salary budgets are developed each year based on factors including economic indicators, market movements and the expected performance of Greater Bank. Greater Bank also utilises a Remuneration Procedure document which aims to ensure rewards are commensurate with performance and the results that are delivered. Greater Bank s remuneration philosophy is remuneration supports the delivery of the organisation s corporate strategy and be aligned to performance. Remuneration for each role is based on position in the market, understanding market conditions salary benchmarking, as well as the experience skills and performance of the individual in the role. Greater Bank aligns the remuneration structure to; strategic business objectives, Greater Banks values and culture, market competitiveness, and to provide flexibility to reward individual performance and value to the organisation. The key factors taken into account when implementing remuneration principles include: Attraction and retention of skilled employees; Engagement and productivity of employees; Affordability; and Competitive remuneration for market and industry.

22 These factors are managed by the following instruments: Benchmarking to independent industry remuneration surveys; Review and benchmarking to similar ADI Enterprise Agreements; The nature and type of measures was not changed in the 2015/16 financial year. Risk and Compliance employees are remunerated independently of the business they oversee through the Remuneration Committee review and approval process, and in accordance with benchmarking data taken from several independent surveys. Incentives For Senior Managers total fixed remuneration (TFR) includes base salary, superannuation and benefits, in addition Senior Managers may be eligible to participate in an applicable bonus scheme. Greater Bank has implemented a short term incentive plan (bonus scheme) for the Executive. The Executive Incentive Plan (EIP) is a significant component of the remuneration framework at Greater Bank, with individual Executive performance a key element in determining the incentive outcomes. The Executives individual performance, in combination with Greater Bank s financial performance, each play a significant role in determining the incentive payment. The EIP defines the incentive framework of participating Executives by providing a dual focus and balance between corporate and individual key performance indicators for the assessment and payment of incentive based remuneration to a participating Executive under the EIP. The amount of the incentive payment for the financial year will, subject to the EIP terms, be: 2/3 in cash (less applicable taxes) when the amount of the incentive payment is determined; and 1/3 in cash (less applicable taxes) on the finalisation and audit of Greater Bank s financial statements for the second financial year after the financial year for which the incentive payment was assessed and determined (deferred EIP amount).

23 Other Senior Managers other than those under the Executive Incentive Plan, have their performance linked to a final performance appraisal to determine performance in the financial year. The ratings of the appraisal are used to determine a bonus amount which reflects the average performance rating. Performance ratings are given for core and role specific competencies relating to individual roles. Each competency has behavioural descriptors to ensure performance ratings are aligned to competences and consistent across the organisation. The bonus is calculated as a percentage of an individual employee s base salary. In addition, this year the performance calibration process was enhanced with the introduction of divisional calibration to further develop consistency in the application of performance ratings to: Ensure evaluation consistency by managers; and Ensure consistency in appraisal ratings and bonus distribution. The maximum value of the bonus range is adjusted annually based on organisational performance, hence the bonus is flexible to adjust in instances of weak organisational performance metrics. Quantitative Disclosure During the year, the Remuneration Committee, of the Board of Greater Bank Ltd, met four times. Remuneration of the Board Remuneration Committee 2015 / 2016 Members are not remunerated for their appointment to the committee but as their appointment as directors of Greater Bank $495,775 The table below presents the Senior Managers who received variable remuneration, guarantee bonus, sign-on award or severance payment during the financial year. Variable remuneration, bonus, sign on award and severance payment 2015 / 2016 No: Employee Total ($) Variable remuneration award discretionary bonus 9 536,742 Guaranteed bonus Sign-on award Severance payment (redundancy/severance pay as lump sum on termination of employment Total 536,742 Nil Nil Nil

24 The table below represents the movement in deferred remuneration: Deferred remuneration Deferred remuneration preadjustment Adjustmentsimplicit Markto-Market value of shares Adjustmentsexplicit Clawbacks Deferred remuneration Postadjustment Outstanding at 30 June 2016 Paid during the year ($) Cash Shares Sharelinked Other Total Cash Shares Sharelinked Other 416, , , , , , , ,885 Total The table below presents total value of remuneration awards for Senior Managers: Total value of remuneration awards for the current financial year Unrestricted $ Deferred $ Total $ Fixed Remuneration Cash-based $2,272,924 - $2,272,924 Shares and share-linked instruments Other $290,885 - $290,885 <> $2,563,809 - $2,563,809 Variable Remuneration Cash-based $354,001 $182,741 $536,742 Shares and share-linked instruments Other <> $354,001 $182,741 $536,742 Total Fixed + Variable Remuneration $2,917,810 $182,741 $3,100,551