Commonwealth Bank of Australia (ASX: CBA) acknowledged an APRA review today, which has helped the bank.
What was announced?
CBA said in an ASX announcement that it acknowledged the APRA review of the progress made against the Prudential Inquiry Remedial Action Plan and the decision relating to CBA’s operational risk capital.
APRA said that CBA has made significant progress in implementing reforms. As a result, the operational risk overlay imposed on CBA is reduced from $1 billion to $500 million with immediate effect.
This reduction represents an increase in common equity tier 1 (CET1) capital of 17 basis points.
CBA CEO Matt Comyn said: “We welcome APRA’s acknowledge of the progress we have made over the past two years. At the same time, we and APRA recognise there is still a substantial amount of work to do before our Remedial Action Plan is fully implemented and embedded across CBA.
“We remain committed to achieving these outcomes and ensuring the improvements to strengthen governance, accountability and risk culture frameworks, practices and outcomes are sustained.”
This is good news for CBA. An increase in the CET1 ratio is helpful. As I mentioned in my other article about CBA today, its dividend prospects are looking better. But there are other ASX dividend shares I’d rather buy such as Brickworks Limited (ASX: BKW).