National Australia Bank (NAB) has achieved closure on its regulatory impositions relating to the foreign exchange option trading issue after the Australian Prudential Regulation Authority (APRA) closed the remaining remedial actions associated with the event.
“The outcome is very pleasing, but we recognise that there is more work to be done as part of a continuous improvement program to ensure our risk management framework continues to strengthen. Everyone at the National Australia Bank is looking forward to continuing to develop a business that is well regarded by all our stakeholders and creates sustainable satisfactory returns for shareholders,” NAB group chief executive John Stewart said.
The announcement means NAB has the approval of the regulator to once again use the internal model for the calculation of the market risk component of risk-weighted assets from January 1, 2007, onwards.
In addition, NAB will no longer have to maintain a capital target of 10 per cent. The removal of this requirement is immediate.
“Together with the positive assurance from our independent auditors over internal controls that we received as part of our annual financial close, and as published in the annual financial report on December 1, 2006, this marks a major step forward for the organisation,” Stewart said.
