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Mutuals Newsletter: March 2020

Mutuals Newsletter: March 2020

The recent outbreak of novel coronavirus (COVID-19) has introduced new challenges to the business environment which call for a measured, practical and informed approach from leaders.

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Brendan Twining

National Sector Leader, Mutual Banks

KPMG Australia

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In this newsletter edition, in addition to helping you understand your business’ exposure to disruption caused by COVID-19, we focus on the following topics:

Stress testing loan portfolios during a pandemic

Loan portfolios may be abruptly impacted due to the coronavirus outbreak, which could lead to correlated increases in default risk, higher provision rates, and an overall increase in credit risk. We would recommend banks to run targeted stress tests to identify vulnerable credit, sectors and supply chains, and then take proactive action.

Draft APRA Prudential Standard APS 117

APRA has been consulting on a revision to APS117 – its prudential standard for Interest Rate Risk in the Banking Book (IRRBB). The new standard is expected to take effect from 1 January 2021 and, for the first time, it will cover all ADIs.

Australian Mutuals – Key developments and updates

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