Tower forced to boost surplus assets
Trans-Tasman financial services groupTowerhas been forced by theAustralian Prudential Regulation Authority (APRA)to boost the surplus assets in its troubled Australian business by at least $30 million.
In a statement today, the Tower group said it would add the $30 million to its surplus assets by the 31st of March after being ordered by APRA to increase its surplus assets “back up to the company's target surplus level quickly”.
Tower was required to make the statement today revealing the state of its capital position after discussions with APRA’s sister regulator, theAustralian Securities and Investments Commission (ASIC).
A spokesperson for ASIC says it “had concerns in relation to [Tower’s] capital adequacy”, but declined to comment further.
Tower says it does not intend to undertake an equity issue to achieve the surplus increase, relying on internally sourced funds instead.
Tower says it does not expect the requirement to increase surplus assets to affect profit projections for the group.
However the group does not expect any dividends to be paid from its Australian business unless its target surplus level is met.
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