Supporting information:

Series descriptions for Banking system data

Interpretation of the tables | Format of the tables | Contents of the tables | Glossary of terms

Interpretation of the tables

The information contained in the table is extracted from the "Key Information Summary" part of the disclosure statements published by registered banks. The information relates only to the periods specified in those disclosure statements. The financial position of a bank may have changed subsequent to the publication of its disclosure statements. The disclosure statements also contain other information that may be relevant in interpreting the information contained in the tables. Readers are advised to consult those disclosure statements for comprehensive information about any particular bank.

Format of the tables

The table is divided into two sections. All locally incorporated banks are listed in the first section, and all overseas incorporated banks (which operate as a branch in New Zealand) are listed in the second section. This is done because it may be misleading to compare locally incorporated banks with overseas incorporated banks. In each section of the table, banks are listed in alphabetical name order.

In the case of overseas incorporated banks, the key information disclosed covers both the New Zealand branch and the bank as a whole. The overseas bank information provided is the most recently published information and is not always for the same date as that provided by the New Zealand branch. In some cases the overseas bank information may be for different dates. The key information disclosed by locally incorporated banks with an overseas parent bank does not include information relating to the overseas parent bank.

All the quantitative information for the current period contained in the Key Information Summaries is included in the tables.

The number of decimal places used to disclose quantitative information is not prescribed, and so differs among banks. This has resulted in varying numbers of decimal places appearing in some lines of the table. Some of the numbers disclosed by banks have been rounded in order to improve the consistency of the table.

Contents of the tables

Accounting period

The first block of information in the table lists the annual balance date of each bank, the date of the end of the accounting period to which the information disclosed relates and the number of months in that accounting period. For example a bank may have a balance date of 31 December, and an accounting period ending on 30 June.

Profitability

Net profit after tax and extraordinary items for the year-to-date is shown. Net profit over the previous 12 months as a percentage of average total assets is also shown. Overseas incorporated banks disclose the profitability of both the Banking Group and the Overseas Banking Group.

Peak credit exposure concentrations

The table shows the peak number of credit exposures over the past quarter to individual customers, or groups of closely related customers. Exposures are calculated as a percentage of equity, and disclosed as the number of exposures within percentage ranges of equity. (Banks are required to disclose peak exposures within 10 percent equity bands. However, some aggregation has been used in the table - readers are advised to refer to the banks' disclosure statements for detailed peak credit exposure concentration information). Customers are subdivided into banks and non-banks. In the case of banks operating here as branches, the exposures are calculated in relation to the equity of the Overseas Banking Group.

Connected persons

For locally incorporated banks the table shows the peak credit exposure to connected persons over the past quarter. (It shows both the exposure to all connected persons and the exposure to non-bank connected persons). The exposures are shown as an amount and as a percentage of tier one capital.

Credit rating

Credit ratings for long-term unsecured obligations payable in New Zealand in New Zealand dollars and the name of the issuer of the rating are disclosed. Some banks have more ratings than those shown in the table. Readers are advised to refer to the banks' disclosure statements for information about additional ratings (if any).

Capital adequacy

The table shows tier one capital and total capital, and each of these as a percentage of risk weighted credit exposures. Locally incorporated banks are required to calculate capital and risk weighted credit exposures in accordance with the Reserve Bank's policy document entitled Capital Adequacy Framework issued in March 2005. Overseas incorporated banks are required to calculate capital and risk weighted credit exposures in accordance with the requirements in their home jurisdiction. These are based on the Basle Capital Accord. (See the article in the June 1996 Bulletin for an explanation of capital adequacy).

Size

The amount of total assets is shown (as at the end of the accounting period), and also the percentage change over the last 12 months. Overseas incorporated banks disclose this information for both the Banking Group and the Overseas Banking Group.

Asset quality

Banks disclose the amount of their impaired assets, and this as a percentage of total assets. Specific provisions (the amount and as a percentage of impaired assets) are also disclosed. Overseas incorporated banks disclose this information for both the Banking Group and the Overseas Banking Group.

Glossary of terms

Banking group

The banking group consists of the New Zealand business of the registered bank. For overseas incorporated banks this usually comprises the New Zealand branch of the overseas bank and subsidiaries of the parent bank incorporated in New Zealand. For locally incorporated banks the banking group usually comprises the bank and its subsidiaries.

Capital - tier one capital and total capital

Tier one capital is capital that is permanently and freely available to absorb losses without the bank being obliged to cease trading. It generally comprises ordinary share capital and retained earnings. Total capital consists of tier one capital plus other capital (called tier two capital) which can only absorb losses in the event of a winding up (eg, revaluation reserves, redeemable preference shares, subordinated debt), less certain deductions (eg, unrealised revaluation losses). See the Reserve Bank's policy document entitled Capital Adequacy Framework issued in March 2005.

Connected persons

Any person or entity that has an ownership interest in the registered bank. Any other entity in which the owner has a substantial interest and any person or entity that has a substantial interest in the owner are also included. (A person or entity holds a substantial interest in an entity if they; own, or receive dividends from, or control more than 20 percent of the shares in an entity; or control, the composition of the board of directors, or the management of the company).

Impaired assets

Any credit exposure for which it is probable that the bank will not be able to collect all amounts owing, and any credit exposure on which the original terms have been changed to grant the debtor a concession, and any asset acquired through the enforcement of security.

Overseas banking group

The overseas incorporated bank and all other entities included in the group for the purposes of financial reporting in the county of domicile of the overseas bank.

Risk weighted credit exposures

This includes both on-balance sheet exposures (e.g. loans to customers) and off-balance sheet contracts that expose a bank to credit risk (e.g. the provision of guarantees). Exposures are risk weighted according to broad categories of relative credit risk.

Specific provisions

An amount that has been charged to profit and loss against identified credit losses or an identified deterioration in the value of an asset.