Hon Ken Travers asks about Keystart's capital adequacy and loan book value. The Minister for Housing responds, clarifying Keystart's regulatory status and financial details.

AnsweredQoN 740Legislative Council
Asked
11 August 2015
Portfolio
Housing

QuestionView source ↗

DEPARTMENT
OF HOUSING — KEYSTART
740. Hon KEN TRAVERS to the Minister for Housing:
(1) Is Keystart
required to hold a minimum level of capital due to its residential mortgage
exposures?
(2) If yes —
(a) what is the
current minimum level it is required to hold; and
(b) what is the
actual current level it holds?
(3) Is this a
formal requirement of the Australian Prudential Regulation Authority?
(4) Does the
government expect there will be any changes to this level?
(5) What is the
current value of Keystart's loan book?

AnswerView source ↗

I thank the honourable member for some notice of the
question.
(1) Keystart
is not a savings account deposit holder and therefore is not regulated by APRA.
It is financially prudent for a lending institution to hold reserves to manage
the loan book, and Keystart, although not bound, is guided by the capital
adequacy principles determined by APRA.
(2)–(3)
Not applicable.
(4) Keystart's
capital adequacy level is set by regular stringent stress testing of the
portfolio. The current level supports such stress testing.
(5) As at 31 July
2015, the current value was $4.18 billion.

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