Financial Sector (Collection of Data) (reporting standard) determination No. 41 of 2006 Reporting Standard ARS 395.0 Business Finance (Cth)
Financial Sector (Collection of Data) (reporting standard) determination No. 41 of 2006
Reporting standard ARS 395.0 Business Finance
Financial Sector (Collection of Data) Act 2001
I, Charles Watts Littrell, a delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:
REVOKE the Reporting Standard ARS 395.0 (2005) Business Finance; and
DETERMINE the Reporting standard ARS 395.0 Business Finance in the form set out in the Schedule, which applies to the financial sector entities referred to in paragraph 2 of the reporting standard.
Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those financial sector entities on the later of 1 July 2006 and the date of registration on the Federal Register of Legislative Instruments.
Dated 26 June 2006
[signed]
Charles Littrell
Executive General Manager
Policy, Research and Statistics
APRA
Interpretation
In this Determination
APRA means the Australian Prudential Regulation Authority.
Schedule
Reporting standard ARS 395.0 Business Finance comprises 25 pages commencing on the next page.
Reporting Standard ARS 395.0
Business Finance
Objective of this reporting standard
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It requires all banks, including banks that are foreign authorised deposit-taking institutions operating in Australia through branch operations, to report to APRA, generally on a quarterly basis, in relation to their business finance.
This reporting standard outlines the overall requirements for the provision of relevant information to APRA. It should be read in conjunction with Form ARF 395.0 Business Finance Statistics and the associated instructions (both of which are attached and form part of this reporting standard).
Purpose
Data collected in Form ARF 395.0 Business Finance Statistics (Form ARF 395.0) is used by APRA for the purpose of prudential supervision. It may also be used by the Reserve Bank of Australia and the Australian Bureau of Statistics.
Application
This reporting standard applies to all banks.
Information required
A bank must provide APRA with the information required by Form ARF 395.0 for each reporting period.
Forms and method of submission
The information required by this reporting standard must be given to APRA either:
(a)in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application; or
(b)manually completed on paper, which must be faxed or mailed to APRA’s head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Reporting periods and due dates
Subject to paragraph 6, a bank must provide the information required by this reporting standard in respect of each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the bank.
APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular authorised deposit-taking institution (ADI), to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:
(a)the particular circumstances of the ADI;
(b)the extent to which the information is required for the purposes of the prudential supervision of the ADI; and
(c)the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics.
The information required by this reporting standard must be provided to APRA by 20 business days after the end of the reporting period to which it relates.
APRA may grant a bank an extension of a due date in writing in which case the new due date for the provision of the information will be the date on the notice of extension.
Authorisation
All information provided by an ADI under this reporting standard must be subject to processes and controls developed by the ADI for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the ADI to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
If an ADI submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the ADI to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the ADI who have authority from the ADI to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a)the Principal Executive Officer of the ADI; or
(b)the Chief Financial Officer of the ADI (whatever his or her official title may be).
Minor alterations to forms and instructions
APRA may make minor variations to:
(a)a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b)the instructions to a form, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify in writing each ADI that is required to report under this reporting standard.
Transitional
An ADI must report under the old reporting standard in respect of a transitional reporting period. For these purposes:
old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).
transitional reporting period means a reporting period under the old reporting standard:
(a)which ended before the date of revocation of the old reporting standard; and
(b)in relation to which the ADI was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.
Interpretation - classifications of ADIs
In this reporting standard:
ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.
ADI list means the attached ADI list
bank means an ADI whose name appears under the heading ‘Australian-owned Banks’, ‘Foreign Subsidiary Banks’ or ‘Branches of Foreign Banks’ in the ADI list.
foreign ADI means an ADI that is not incorporated in Australia.
If an ADI is not in the ADI list, then if the ADI assumes or uses the word ‘bank’ in relation to its financial business, it is taken to be a bank for the purposes of this reporting standard.
APRA may in writing determine that an ADI is taken to be a bank for the purposes of this reporting standard (even if, under paragraph 15 or 16, it comes within a different classification).
Interpretation - other definitions
In this reporting standard:
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.
Principal Executive Officer means the principal executive officer of the bank for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity.
reporting period means a reporting period under paragraph 5 or, if applicable, paragraph 6.
The ADI list
Australian-owned Banks
Adelaide Bank Limited
AMP Bank Limited
Australia and New Zealand Banking Group Limited
Bank of Queensland Limited
Bendigo Bank Limited
Commonwealth Bank of Australia
Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
Elders Rural Bank Limited
Macquarie Bank Limited
Members Equity Bank Pty Limited
National Australia Bank Limited
St George Bank Limited
Suncorp-Metway Limited
Westpac Banking Corporation
Foreign Subsidiary Banks
Arab Bank Australia Limited
Bank of China (Australia) Limited
Bank of Cyprus Australia Pty Limited
BankWest (the trading name of Bank of Western Australia Limited, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
Citigroup Pty Limited
HSBC Bank Australia Limited
ING Bank (Australia) Limited
Investec Bank (Australia) Limited
Laiki Bank (Australia) Limited
NM Rothschild & Sons (Australia) Limited
Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)
Branches of Foreign Banks
ABN AMRO Bank N.V.
Bank of America, National Association
Bank of China (subject to depositor protection provisions of the Banking Act 1959)
Bank of Tokyo-Mitsubishi UFJ, Ltd
Barclays Capital (the trading name of Barclays Bank plc)
BNP Paribas
Citibank N.A.
Credit Suisse
Deutsche Bank AG
HBOS Treasury Services plc
HSBC Bank plc
ING Bank NV
JPMorgan Chase Bank, National Association
Mizuho Corporate Bank, Ltd
Oversea-Chinese Banking Corporation Limited
Rabobank Nederland (the trading name of Co-operative Central Raiffeisen-Boerenleenbank B.A.)
Royal Bank of Canada
Société Générale
Standard Chartered Bank
State Bank of India
State Street Bank and Trust Company
The International Commercial Bank of China
The Royal Bank of Scotland Plc
The Toronto-Dominion Bank
Taiwan Business Bank
UBS AG
United Overseas Bank Limited
WestLB AG
Building Societies
ABS Building Society Ltd
B & E Ltd
Greater Building Society Ltd
Heritage Building Society Limited
Home Building Society Ltd
Hume Building Society Ltd
IMB Ltd
Lifeplan Australia Building Society Limited
Mackay Permanent Building Society Ltd
Maitland Mutual Building Society Limited
Newcastle Permanent Building Society Ltd
Pioneer Permanent Building Society Limited
The Rock Building Society Limited
Wide Bay Australia Ltd
Credit Unions
Alliance One Credit Union Ltd
AMP Employees' & Agents Credit Union Limited
Austral Credit Union Limited
Australian Central Credit Union Limited
Australian Country Credit Union Ltd (trading as Reliance Credit Union)
Australian Defence Credit Union Ltd
AWA Credit Union Limited
Bananacoast Community Credit Union Ltd
Bankstown City Credit Union Ltd
Berrima District Credit Union Ltd
Big Sky Credit Union Ltd
Blue Mountains and Riverlands Community Credit Union Ltd
Broadway Credit Union Ltd
Calare Credit Union Ltd
CAPE Credit Union Limited
Capital Credit Union Ltd
Capricornia Credit Union Ltd
Carboy (SA) Credit Union Limited
Central Murray Credit Union Limited
Central West Credit Union Limited
Circle Credit Co-operative Limited
Coastline Credit Union Limited
Collie Miners Credit Union Ltd
Community Alliance Credit Union Limited
Community CPS Australia Limited
Community First Credit Union Limited
Companion Credit Union Limited
Comtax Credit Union Limited
Connect Credit Union of Tasmania Limited
Country First Credit Union Ltd
CPS Credit Union Co-operative (ACT) Limited
Credit Union Australia Ltd
Credit Union Incitec Pivot Limited
Croatian Community Credit Union Limited
CSR and Rinker Employees Credit Union Limited
Dairy Farmers Credit Union Ltd
Defence Force Credit Union Limited
Discovery Credit Union Ltd
Dnister Ukrainian Credit Co-operative Limited
ELCOM Credit Union Ltd
Electricity Credit Union Ltd
Encompass Credit Union Limited
Ericsson Employees Credit Co-operative Limited
Esso Employees' Credit Union Ltd
Eurobodalla Credit Union Ltd
Family First Credit Union Limited
Fire Brigades Employees' Credit Union Limited
Fire Service Credit Union Limited
Firefighters & Affiliates Credit Co-operative Limited
First Option Credit Union Limited
First Pacific Credit Union Limited
Fitzroy & Carlton Community Credit Co-operative Limited
Ford Co-operative Credit Society Limited
Gateway Credit Union Ltd
Geelong & District Credit Co-operative Society Limited
GMH (Employees) Q.W.L. Credit Co-operative Limited
Goldfields Credit Union Ltd
Gosford City Credit Union Ltd
Goulburn Murray Credit Union Co-operative Limited
H.M.C. Staff Credit Union Ltd
Heritage Isle Credit Union Limited
Hibernian Credit Union Limited
Holiday Coast Credit Union Ltd
Horizon Credit Union Ltd
Hoverla Ukrainian Credit Co-operative Ltd
Hunter Mutual Limited
Hunter United Employees' Credit Union Limited
Industries Mutual Credit Union Limited
Intech Credit Union Limited
Island State Credit Union Ltd
Karpaty Ukrainian Credit Union Limited
La Trobe Country Credit Co-operative Limited
La Trobe University Credit Union Co-operative Limited
Laboratories Credit Union Ltd
Latvian Australian Credit Co-operative Society Limited
Lithuanian Co-operative Society (Talka) Limited
Lysaght Credit Union Ltd
MacArthur Credit Union Ltd
Macaulay Community Credit Co-operative Limited
Macquarie Credit Union Limited
Maleny and District Community Credit Union Limited
Manly Warringah Credit Union Ltd
Maritime Workers of Australia Credit Union Ltd
Maroondah Credit Union Ltd
MECU Limited
Melbourne University Credit Union Limited
Memberfirst Credit Union Limited
New England Credit Union Ltd
Newcom Colliery Employees' Credit Union Ltd
Northern Inland Credit Union Ltd
Nova Credit Union Limited
NSW Teachers Credit Union Ltd
Old Gold Credit Union Co-operative Limited
Orana Credit Union Ltd
Orange Credit Union Limited
Phoenix (NSW) Credit Union Ltd
Plenty Credit Co-operative Limited
Police & Nurses Credit Society Limited
Police Association Credit Co-operative Limited
Police Credit Union Limited
Polish Community Credit Union Ltd
Power Credit Union Limited
Powerstate Credit Union Ltd
Pulse Credit Union Limited
Qantas Staff Credit Union Limited
Queensland Community Credit Union Limited
Queensland Country Credit Union Ltd
Queensland Police Credit Union Limited
Queensland Professional Credit Union Ltd
Queensland Teachers' Credit Union Limited
Queenslanders Credit Union Limited
Railways Credit Union Limited
RegionalOne Credit Union Limited
Resources Credit Union Limited
RTA Staff Credit Union Limited
Satisfac Direct Credit Union Limited
Savings and Loans Credit Union (S.A.) Ltd
Security Credit Union Ltd
Select Credit Union Ltd
Service One Credit Union Ltd
SGE Credit Union Limited
Shell Employees' Credit Union Limited
South West Slopes Credit Union Ltd
Southern Cross Credit Union Limited
South-West Credit Union Co-operative Limited
St Mary's Swan Hill Co-operative Credit Society Limited
St Patrick's Mentone Co-operative Credit Society Limited
Statewest Credit Society Limited
Sutherland Credit Union Ltd
Sutherland Shire Council Employees' Credit Union Ltd
Sydney Credit Union Ltd
Tartan Credit Union Ltd
The Broken Hill Community Credit Union Ltd
The Gympie Credit Union Ltd
The Police Department Employees' Credit Union Limited
The Summerland Credit Union Limited
The TAFE and Community Credit Union Limited
The University Credit Society Limited
Traditional Credit Union Limited
TransComm Credit Co-operative Limited
Uni Credit Union Ltd
United Credit Union Limited
Victoria Teachers Credit Union Limited
Wagga Mutual Credit Union Ltd
Warwick Credit Union Ltd
WAW Credit Union Co-operative Limited
Westax Credit Society Ltd
Western City Credit Union Ltd
Woolworths/Safeway Employees' Credit Co-operative Limited
Wyong Council Credit Union Ltd
Yennora Credit Union Ltd
Specialist Credit Card Institutions (SCCIs)
Foreign-owned SCCIs
GE Capital Finance Australia
GE Finance Australasia Pty Ltd
Locally Incorporated SCCIs
MoneySwitch Limited
Other ADIs
These companies are run by industry bodies and provide services (eg payments clearing) to member building societies and credit unions.
Australian Settlements Limited
Credit Union Services Corporation (Australia) Limited
Indue Ltd
One ADI that provides general banking services which does not fall into the other categories.
Cairns Penny Savings & Loans Limited
Authorised Non-Operating Holding Companies
HBOS Australia Pty Ltd
Reporting Form ARF 395.0
Business Finance Statistics
Instruction Guide
General directions and notes
Reporting entity
This form is to be completed by all locally incorporated banks and foreign authorised deposit-taking institutions (ADIs) on a Domestic books basis.
The Domestic books of the locally incorporated banks and foreign ADI relates to the Australian books of the Australian ADI and has the following scope:
is an unconsolidated report of the Australian licensed ADI's operations/transactions that are booked inside Australia;
exclude offshore branches of the Australian licensed ADI from this reporting unit;
exclude offshore banking units based overseas from this reporting unit;
do not consolidate Australian and offshore controlled entities or associated entities that are not ADIs;
include Australian based offshore banking units of the licensed ADI; and
include transactions with non-residents recorded on Australian books.
Securitisation deconsolidation principle
Except where stated otherwise on this form, reporting entities must treat any securitisation program special purpose vehicles (SPVs) in which the ADI (or a member of its consolidated group) participates in accordance with APRA’s clean sale and separation requirements as non-consolidated independent third parties. As a result, for reporting purposes all assets, liabilities, revenues and expenses of these SPVs must be excluded from the ADI’s reported amounts. Where relevant, report on this form any exposure to or other transaction between the ADI and any such SPV as if such transaction was conducted with an independent third party, regardless of whether the SPV or its assets is consolidated for accounting purposes.
APRA's clean sale and separation requirements are set out in APS 120 Funds Management and Securitisation and related Guidance Notes AGN 120.3 Purchase and Supply of Assets (including Securities Issued by SPVs) and AGN 120.1 Disclosure and Separation. Whenever the clean sale and separation requirements are not met, all the assets, liabilities, revenues and expenses of the SPV are to be consolidated with the ADI’s reported amounts.
Reporting period
The form is to be completed as at the last day of the stated reporting quarter. Locally incorporated banks and foreign ADIs should submit the completed form to APRA within 20 business days after the end of the relevant reporting quarter.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).
The general requirements of AASB 121 for translation are:
foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[1]
[1]Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Spot rate means the exchange rate for immediate delivery.
foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction;[2]
[2]Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (eg some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss; and
translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
Translation of financial reports should otherwise follow the requirements in AASB 121.
Basis of preparation
Unless otherwise specifically stated, institutions are to comply with Australian accounting standards regarding the measurement of asset, liability and equity items.
Specific instructions
This quarterly collection of statistics on lending to business covers:
loans and bills outstanding classified into the following size tiers:
·under $100,000;
·$100,000 to less than $500,000;
·$500,000 to less than $2 million; and
·$2 million and over;
within each size tier, loans and bills outstanding classified by interest rate (Sections A, B and C);
within each size tier, loans and bills outstanding classified by industry of borrower (Section D);
new credit approvals to business classified by size and by purpose (Section E); and
fees charged on loans and bills outstanding to business customers (for which banks are required to attach a schedule of fees each quarter).
The totals of Sections A, B and C should sum to the totals shown in Section D.
Where a customer has more than one credit facility, each facility should be reported separately, by size and by interest rate. Similarly, where there is more than one parcel of bills issued under a particular facility (with different maturities and yields), each parcel should be reported separately, by size and by interest rate.
Sections A, B & C - Impaired loans (& bills)
In this form, report impaired loans - i.e. non-accrual and restructured loans - net of specific provisions in the lowest interest rate tier of Sections A, B and C, and as an addendum item as shown on the form.
Section A – Variable interest rate loans
Variable-rate loans include facilities where the interest rate may be changed at any time during the term of the loan. Typically they comprise:
loans priced off banks' published business indicator loan rates such as overdrafts and fully drawn loans; and
business "special offers" where the rate charged is initially fixed or capped for a limited period, but is later reset in terms of the published indicator rate.
The interest rate charged to the borrower (i.e. the indicator or reference rate plus a margin for credit risk) should be reported.
Section B – Fixed interest rate loans
Fixed-rate loans include facilities where the interest rate remains unchanged for the full term of the loan. The interest rate charged to the borrower (including a margin for credit risk) should be reported.
Section C - Bills outstanding
Bills outstanding include acceptance and endorsement facilities. The rate reported should equate to the annual cost to the customer of a bill. It should comprise the bill discount rate expressed as annual rate, plus all fees - other than establishment fees - charged for providing the facility, also expressed as an annual percentage of the bills' face value. Where the discount rate on a bill is not known, an estimate based on prevailing market rates should be used. Bill fees include acceptance or endorsement fees, facility fees, line fees, activation fees, usage fees, rollover fees and handling fees.
In addition to acceptance and endorsement facilities, loans priced off money market reference rates such as cash and bank bill rates should be included in Section C. Typically, the interest rate on these loans is reset periodically in line with changes in the prevailing reference rate. The interest rate charged to the borrower (including a margin for credit risk) should be reported. As an addendum item, report the total value of these funded loans for each size category.
Section D - Total credit outstanding
The borrower categories are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) groups of industries:
agriculture, forestry, and fishing;
mining;
manufacturing;
construction;
wholesale trade; retail trade; and transport and storage are combined;
finance and insurance; and
all other industries comprises the ANZSIC groups: electricity, gas and water supply; accommodation, cafes and restaurants; communication services; property and business services; government administration and defence; education; health and community services; cultural and recreational services; and personal and other services.
The complete ANZSIC listing is an Australian Bureau of Statistics (ABS) publication (Catalogue No. 1292.0).
Section E - New credit approvals
Approvals in Section E should match data on new and increased facilities to business reported in the ABS Commercial Finance and Lease Finance returns. Note that quarterly approvals data is sought (i.e. an aggregation of the relevant monthly ABS returns).
The following ABS purpose codes for commitments under fixed loan facilities should be used:
construction finance (320 to 327);
purchase of real property (329 to 337);
wholesale finance (340);
purchase of plant and equipment (341 to 343);
refinancing (348); and
other (345, 346 and 349).
Commitments under Revolving Credit Facilities need to reconcile with Item 390 in the Commercial Finance return.
For lease finance show the total value of goods financed under new lease commitments for both finance and operating leases (Items 456 and 556 in the Lease Finance return).
Schedule of fees
One aim of the return is to measure the total cost of business credit. To facilitate this, banks should attach to the return each quarter a schedule of all bank fees charged to business customers on each of variable rate loans, fixed rate loans, bill acceptances and bill endorsements.
The schedule should include the following basic information:
the type of facility on which the fee is charged (i.e. overdrafts, term loans etc);
the fee charged, generally expressed in dollars or as a percentage of the size of the facility. Any differences in fees for loans or bills of different sizes should be shown. Where no fixed or set fee exists, show the range typically charged; and
how frequently the fee is charged (i.e. quarterly, half yearly etc).
Show all fees charged, even when those fees might be waived for certain customers.
Fees typically charged on loans and bills include:
application, approval or establishment fees charged when the facility is established or the size of the facility increased;
loan administration fees, also known as loan service, line or facility fees;
commitment and unused limit fees levied on the undrawn portion of a facility; and
certain specific fees applying to bills including acceptance and endorsement fees (i.e. risk margins), activation fees, usage fees, rollover fees and handling fees.
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