(Adds quotes, IMF comments)
MELBOURNE Nov 23 Australia's major banks will
need a small capital increase to honour their Basel III global
banking obligations, but should then easily meet them, the chief
executive of Australia and New Zealand Banking Group Ltd
said on Friday.
The International Monetary Fund this week said the country's
"Big Four" banks - ANZ, National Australia Bank,
Commonwealth Bank of Australia and Westpac --
should be required to raise more reserves because the industry
was dominated by the four majors.
The IMF said the risk to the financial system was increased
by the majors controlling 80 percent of local banking assets and
88 percent of home mortgages.
ANZ Chief Executive Michael Smith stressed that Australian
banks were among the strongest in the world.
"There is no doubt that you will have further capital calls
in terms of the large four banks," Smith told a business lunch.
"I don't think it will be a dramatic increase in the capital
charge, it will be half a percent or something like that. It
will be quite easy to generate that," he added.
The full Basel III rules are due to come into force in 2016
and Smith said the local banks would have plenty of time to
prepare for the increased capital requirements.
The Big Four banks posted a combined record profit of more
than $25 billion in 2011/12.
The IMF said a higher capital requirement for Australian
banks would be desirable to bolster the stability of the
financial system and would seem "a natural next step".
Australia's Prudential Regulatory Authority plans to
introduce the Basel III requirements locally slightly ahead of
(Reporting by Victoria Thieberger; Editing by Kim Coghill and