TSB Bank Faces Independent Review Amid Capital and Liquidity Ratio Issues
The Reserve Bank of New Zealand requested that TSB bank commission an independent report under Section 95 of the Banking (Prudential Supervision) Act 1989. This was after TSB identified issues with its capital and liquidity ratios, which it reported to the RBNZ.
TSB has appointed Deloitte to conduct the review, with a draft expected at the end of October and the final report due in November. The RBNZ will not comment on the matter further, citing it as an ongoing prudential issue.
In a press release, TSB stated that its liquidity and funding positions are sound, and the bank remains well-capitalized. It described the review as an additional level of independent assurance ahead of its proposed merger with Heartland Bank.
TSB's Annual Report and Disclosure Statement for 2026 show that it has more CET1 capital than any of the big five banks and among the lowest non-performing loans in the country. Its core funding ratio is the highest of any registered bank, even after correcting errors. However, TSB did revise 121 data points across nine quarters since 2018, which puts it fourth among banks.
TSB's auditor, EY, gave a clean opinion with no going-concern flag in its annual report. The only key audit matter was the allowance for expected credit losses. However, the auditor did not extend their opinion to the capital and liquidity ratios, which received a lighter 'limited assurance' check.