RBNZ Orders Independent Review of TSB's Capital and Liquidity Ratios

The Reserve Bank of New Zealand (RBNZ) has ordered TSB to conduct an independent review of its capital and liquidity ratios, citing issues in how it calculates and reports these figures.

This move comes as TSB prepares for a proposed merger with Heartland Bank, which would create a new bank called TSB Heartland Bank. The RBNZ issued the order under Section 95 of the Banking (Prudential Supervision) Act 1989, giving it the power to require a report from an independent person.

TSA has already identified errors in its calculation of regulatory liquidity ratios and risk-weighted assets, which affected its capital adequacy. The bank says these issues were resolved by September 30, but prior-year figures have not been restated as the impact was deemed immaterial.