National Australia Bank adjusted its reserving policy from the December 2009 quarter, cutting the tier one capital ratio by 13 basis points. NAB disclosed the shift in policy in its "risk and capital report" for the quarter published yesterday. The bank did not mention the shift in policy in its trading update last Friday.The shift in policy is required to meet prudential standards, which require that the general reserve for credit losses is adequate to absorb losses, whether apparent (in which case accounting standards require them to be reserved) or not.The quarterly "pillar 3" report shows a slight reduction in credit exposures for NAB over the December 2009 quarter, down $2 billion to $641 billion.Corporate exposures fell nine per cent over the quarter to $224 billion. While this may to some extent reflect customer demand it does not really reflect the surge in equity raising (which on the whole occurred over the early part of 2009) and so provides something of an antidote to the "open for business" theme pushed by the bank in Australia and Britain.Impaired loans increased five per cent over the December quarter to $5.7 billion.Corporate lending in Britain (and classified under the "standardised" approach) accounted for about a fifth of the increase in impaired loans.Rising retail delinquencies elsewhere, mainly on credit cards, was the other major mover.