Australia boosts capital requirements for ING's local unit after liquidity misstatements

Australia's prudential regulator, the Australian Prudential Regulation Authority (APRA), has imposed new license conditions on ING Bank Australia, requiring the bank to hold more liquidity and capital. These measures follow the bank's overstatement of its liquidity position, which at times led to breaches of minimum requirements. APRA increased the minimum liquidity requirements and imposed a A$50 million operational risk capital add-on to penalize weaknesses in prudential reporting and higher operational risk. The local unit of the Amsterdam-based bank notified APRA in July after identifying miscalculations in its liquidity position over several years, which resulted in overstated Liquidity Coverage Ratios (LCR). While the bank reported an LCR of around 160%, the true figure was substantially lower and occasionally dropped below the mandated 100% requirement. As part of the new conditions, ING Australia will also be required to commission an independent review to assess the root causes of the reporting failures and evaluate its broader risk management and governance practices. Melanie Evans, CEO of ING Australia, stated that the bank regrets the deficiencies and is committed to meeting APRA's expectations regarding risk management, governance, and regulatory reporting.