The Australian Prudential Regulation Authority (APRA) has moved against ING Bank Australia, imposing new licence conditions and ordering the bank to hold additional capital and liquidity after uncovering serious, long-running errors in how it calculated its liquidity position.
ING notified the regulator in July that it had found material miscalculations stretching back several years, which had significantly overstated its liquidity coverage ratio (LCR) — a key measure of a bank's ability to withstand short-term cash outflows.
While the bank had been reporting an LCR of around 160%, its actual figure was materially lower and, at certain points, fell below the 100% minimum set out in Prudential Standard APS 210. ING has since lifted its liquidity buffers well above APRA's floor.
The breach carries particular weight for the broking industry: around 95% of ING's home loans were originated through brokers as of last year, and that broker-driven growth has helped the bank become Australia's sixth-largest mortgage lender, with its loan book growing more than 11% year-on-year — outpacing the big four's average.
APRA said it still regards ING as financially resilient but described the breaches as serious rather than a simple administrative slip. As a result, the bank must now commission independent reviews into what caused the reporting failure and examine its broader risk management and governance practices, alongside developing a remediation plan and securing independent assurance that fixes have actually been embedded.
The regulator has also lifted ING's minimum liquidity requirements while remediation is underway and applied a $50 million operational risk capital add-on to reflect heightened operational risk concerns and possible wider weaknesses in the bank's prudential reporting. These measures stay in place until APRA is satisfied the underlying issues have been resolved.
APRA deputy chair Therese McCarthy Hockey said the scale of ING's footprint — more than two million customers and over $100 billion in assets — meant the regulator expected far stronger safeguards.
"As such, APRA expects it to have robust governance and internal controls to support its financial and operational resilience," McCarthy Hockey said.
"When a bank cannot accurately measure one of its most important financial safeguards, it raises fundamental questions about the effectiveness of its risk management and controls. APRA is therefore acting decisively to ensure ING rectifies these weaknesses expediently."
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