The Reserve Bank said BNZ identified errors "during a process of remediation" which began in early 2018 and will continue through 2020. BNZ made three capital calculation errors, which resulted in "misreported risk-weighted assets over a number of years".
The RBNZ said it had "increased its supervisory monitoring" of BNZ and applied "precautionary adjustments to its capital requirements".
BNZ has been forced to increase the "risk weight floor" of its operational risk capital model from $350 million to $600 million. The $250 million increase is a "supervisory capital overlay", the central bank added.
BNZ was not in breach of its minimum bank capital requirements at any stage, the RBNZ said.
“However given the likelihood that further compliance issues will be discovered during the review and remediation, the Reserve Bank regards a precautionary capital adjustment as prudent,” Deputy Governor Geoff Bascand added.
The big four lender is the latest to have its wrists slapped by the Reserve Bank for capital failings. In May, the central bank revoked ANZ's licence to model its own operational risk capital, due to "persistent failure in its controls and attestation process".
The Reserve Bank forced ANZ to increase its risk capital by 60%, or $277 million.
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