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Notes to the consolidated fnancial statements (continued)

for the year ended 30 June 2011

7. Banking – Specifc disclosures (continued)

7.11 Banking – Capital adequacy (continued)

For calculation of minimum prudential capital requirements, the Banking business area has adopted the Standardised Approaches. The consolidated Banking capital adequacy position is set out below:

BANKING

2011 2010 $m $m

Tier 1

Fundamental Tier 1

Ordinary share capital 1,789 12,783 Retained profts 902 847 2,691 13,630

Residual Tier 1

Reset preference shares 102 144 Convertible preference shares 736 735 Preference shares not eligible for inclusion in Tier 1 (15) – 823 879

Tier 1 deductions

Goodwill and other intangibles arising on acquisition (29) (7,809) Tier 1 deductions for investments in subsidiaries, capital support (18) (1,428) Other Tier 1 deductions (176) (347) (223) (9,584) Total Tier 1 capital 3,291 4,925

Tier 2

Upper Tier 2

APRA general reserve for credit losses 248 346 Perpetual subordinated notes 170 170 Asset revaluation reserves 17 7 Preference shares not eligible for inclusion in Tier 1 15 – 450 523

Lower Tier 2

Subordinated notes 883 1,458 883 1,458

Tier 2 deductions for investments in subsidiaries, capital support (18) (1,428) Total Tier 2 capital 1,315 553 Capital base 4,606 5,478 Total assessed risk 34,365 37,234

% %

Risk-weighted capital ratios

Tier 1 9.6 13.2 Tier 2 3.8 1.5 Total risk-weighted capital ratio 13.4 14.7