Westpac appear to be doing the most to reduce their credit exposure in residential lending and increasing the loss given default as they have come out with a ratio of 16 per cent, compared with NAB's 22 per cent. This is just a guess, but worth keeping in mind.
The home loan portfolios are large, and so while the risk weights are low the risk weighted asset levels are second highest after corporate lending.
Effective work here by banks can reduce capital requirements, particularly if banks can shift parts of their portfolio from "standardised" into "advanced" - the standardised weights are around 50 per cent.
In the segment of "qualifying revolving retail lending" - meaning credit cards and overdrafts - Westpac is once again doing the best, with a ratio of risk weighted assets to credit exposure of 33 per cent.
Commonwealth is doing the worst with a ratio of 53 per cent. CBA does have the smallest portfolio here, though.
ANZ has the largest revolving portfolio and also has the second best ratio.
Meanwhile in the overflow of "other retail lending" segment CBA and NAB have risk weighted assets and credit exposures at the same level. Westpac and ANZ reported ratios of 55 per cent, so there must be different methods used.
Ozrisk