Conditions of licence NBDT - 1 October 2026

Ref #3299666 v1.1
L1-L3, Britomart East Building, 2-16 Takutai Square, Auckland 1010.
PO Box 2498, Wellington 6140, New Zealand. +64 9 366 2099 rbnz.govt.nz 7 August 2026 [FirstName Surname] Role Entity Name By email: Firstname.Lastname@rbnz.govt.nz Dear [FirstName] Licence conditions issued under section 18(2) This letter outlines the conditions that the Reserve Bank is imposing on [entity]’s licence under
section 18(2) of the Non-bank Deposit Takers Act 2013 (Act), with effect from 1 October 2026.
The proposed conditions modify the prudential obligations imposed on the entity by the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (Regulations), specifically the risk weights used in calculating the deposit taker’s capital ratio and the minimum capital ratio that is included in the deposit taker’s trust deed. On 15 April 2026, the Reserve Bank provided notice and sought feedback on a proposed set of conditions of licence. Feedback was received, and on 10 June 2026 I wrote to you to inform you about the outcome of the consultation and our final decisions. These final decisions included the change to the commencement date to 1 October 2026 and the addition of the new SME lending category and reverse mortgage lending category. In the 10 June 2026 letter I noted that implementing the new risk weights for lending to SMEs needed to wait until the separate consultation on changes to Banking Prudential Requirements (BPR) was complete. This would allow for consistency across the BPRs and the Conditions we are issuing under section 18(2). The final BPRs have now been published on our website. The attached licence conditions will apply on and after 1 October 2026 and are expected to remain in force until revoked as a result of the Deposit Takers Act 2023 (DTA) repealing the Act. At that point, the capital standard issued under the DTA will come into force. Data reporting templates are being modified to reflect the Conditions. The revised template will be provided to you by the end of August. Any data reporting for the October month and onwards should be in accordance with these Conditions and the revised templates.

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If you have any questions regarding this letter or the attached conditions of licence, please email DTA@rbnz.govt.nz or contact your supervisor. Yours sincerely Stan Christian Acting Director of Prudential Supervision

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Non-bank Deposit Takers Act 2013
Licence conditions for [entity]
With effect from 1 October 2026, the Reserve Bank imposes the following conditions of licence on [entity] under section 18(2), and in accordance with section 20. Note: These conditions are being applied to all licensed non-bank deposit takers. Conditions

1. Minimum capital ratio
   The requirement in regulation 8(2)(a) of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 (the Regulations) is modified such that the requirement is as follows:
   The deposit taker and the trustee must ensure that the minimum capital ratio that is included in the trust deed is:
    not less than 9%, if the deposit taker has a credit rating.
   For completeness, the above condition does not change regulation 8(2)(b) or clause 7 of the Non￾bank Deposit Takers (Credit Ratings Minimum Threshold) Exemption Notice 2016, which allows, in certain circumstances, an NBDT to be exempt from having a current credit rating if the NBDT’s capital ratio is:
    at least 10%, if the deposit taker’s average consolidated liabilities are less than $20 million.  at least 12%, if the deposit taker’s average consolidated liabilities are $20 million or more but less than $40 million.
2. Calculation of risk-weighted amount for credit risk
   The following conditions modify the requirements relating to calculating risk-weighted amounts for credit risk under the Regulations. 2.1.Modification of definitions The definitions in regulation 3(1) of the Regulations are modified as follows:
   The definition of “residential mortgage loan” is modified such that the definition is as follows:
   residential mortgage loan or RML means a loan secured by a mortgage over a residential property used primarily for residential purposes either by the mortgagor or by a tenant of the mortgagor. A RML must be classified as one of the following:
    past due RML;
    non-property investment RML;

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 property investment RML; or
 reverse RML.
The following additional definitions apply:
non-property investment RML means a RML secured over only owner-occupied residential property. owner-occupied residential property means:
 a property where a legal and/or beneficial interest is held in the property by a natural person(s) and/or a related party(ies) of a natural person; and  the natural person(s) referred to above, or their spouse, civil union partner, or de facto partner, intends to occupy the property either as their principal or secondary residence (a secondary residence includes a holiday home or a second home that is primarily for the use of that person); and  in respect of a secondary residence, no rental income is derived from that property, except to the extent that the rental income is minimal. past due means a loan that has a contractual payment 90 days or more past its due date or have exceeded its contractual credit limit for 90 days or more. past due non-RML means a loan that is past due, other than a RML. past due RML means a RML that is past due and applies to non-property investment RML and property investment RML. A RML (except for a reverse RML) that is past due must be classified as a past due RML. property investment RML means a RML that is not a non-property investment RML. reverse RML means a RML for which payments of principal or interest are not due in accordance with an agreed repayment schedule, but rather on the occurrence of a specified trigger event, in which case the repayment of the loan is made from the proceeds of sale of the property. small and medium enterprise exposure or SME exposure means a loan to a corporation, partnership, or proprietorship, where:
 the counterparty is unrated; and either:

• the counterparty has total annual revenue of less than $50 million, provided that
  where the counterparty is part of a corporate group it may only be treated as an SME exposure if the total consolidated annual revenue for the group is less than $50 million; or
• if the counterparty’s total annual revenue cannot reasonably be ascertained, the
  exposure to the counterparty is less than $5 million.

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SME retail means:
 a SME exposure that is in the form of a small business lending facility or commitment, excluding exposures secured by residential property, derivatives and other securities such as bonds and equities; and  provided that the maximum aggregated exposure to the SME is less than $2 million (aggregated exposure means the gross amount of all exposures to the SME, the SME’s corporate group (if relevant), and any related parties, excluding the application of any credit risk mitigation arrangements). SME corporate means a SME exposure that is not treated as SME retail.
2.2. Modification of requirements in regulation 10
A deduction under regulation 10(3) of the Regulations includes, in relation to a reverse RML for which the loan amount is greater than the property value (as calculated under the modified requirements in regulation 16), an amount equal to the loan value less the property value.
2.3. Modification of requirements in regulation 12
Despite the requirements in regulation 12(1)(a) and (b) of the Regulations, the risk-weighted amount for a reverse RML for which the loan amount is greater than the property value is 100% of the property value, as calculated under the modified requirements in regulation 16.
2.4. Modification of requirements in regulation 16
The requirements in regulation 16 of the Regulations are modified as follows:
For a reverse RML, the property value calculated under regulation 16 must be updated at least every three years and, at that time, adjusted using the following formula:
𝑃𝑟𝑜𝑝𝑒𝑟𝑡𝑦 𝑣𝑎𝑙𝑢𝑒 = {
𝑀𝑎𝑥(𝑉0 , 80% ∗ 𝑉𝑅) 𝑖𝑓 𝑉𝑅 > 𝑉0, 𝑜𝑟 𝑉𝑅 𝑖𝑓 𝑉𝑅 ≤ 𝑉0 Where- 𝑉0 is the total value of the residential property that is security for the RML determined at origination in accordance with the deposit taker’s property valuation policy; and 𝑉𝑅 is the total value determined in accordance with the deposit taker’s property valuation policy at the most recent three-yearly update. The loan-to-value ratio for a reverse RML for which the property value has not been updated in accordance with the requirement above is 150%.

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2.5. Risk weights
Table 1 of the Schedule within the Regulations is modified such that the table is as follows:
Table A: Risk-weighted exposures for on-balance sheet assets
Category Specifics Risk weight
Cash notes, coin, and gold bullion held by deposit taker or borrowing group member (as applicable) on site 0% Claims on Crown and Reserve Bank 0% Past due non-RML the attributable allowance for expected credit losses for the loan is equal to or greater than 20% of the outstanding amount of the loan 100% the attributable allowance for expected credit losses for the loan is less than 20% of the outstanding amount of the loan 150% Past due RML 100% Claims on public sector entities 20% Claims on New Zealand registered banks 20% Rated short-term claims (see regulations 14 and 15) with a rating grade of 1 20% with a rating grade of 2 50% with a rating grade of 3 100% with a rating grade of 4 150% Rated long-term claims (see regulations 14 and 15) with a rating grade of 1 20% with a rating grade of 2 50% with a rating grade of 3 100% with a rating grade of 4 100% with a rating grade of 5 150% with a rating grade of 6 150% Reverse RML with a loan-to-valuation ratio not exceeding 30% 40%

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Category Specifics Risk weight with a loan-to-valuation ratio exceeding 30% but not exceeding 60% 50% with a loan-to-valuation ratio exceeding 60% but not exceeding 80% 80% with a loan-to-valuation ratio exceeding 80% but not exceeding 100% 100% Qualifying insured residential mortgage loans 20% Non-property investment RML first ranking with a loan-to-valuation ratio not exceeding 50% 20% first ranking with a loan-to-valuation ratio exceeding 50% but not exceeding 60% 25% first ranking with a loan-to-valuation ratio exceeding 60% but not exceeding 70% 30% first ranking with a loan-to-valuation ratio exceeding 70% but not exceeding 80% 35% first ranking with a loan-to-valuation ratio exceeding 80% but not exceeding 90% 50% first ranking with a loan-to-valuation ratio exceeding 90% but not exceeding 100% 75% first ranking with a loan-to-valuation ratio exceeding 100% 100% Second or subsequent 100% Property investment RML first ranking with a loan-to-valuation ratio not exceeding 50% 25% first ranking with a loan-to-valuation ratio exceeding 50% but not exceeding 60% 30% first ranking with a loan-to-valuation ratio exceeding 60% but not exceeding 70% 40% first ranking with a loan-to-valuation ratio exceeding 70% but not exceeding 80% 40% first ranking with a loan-to-valuation ratio exceeding 80% but not exceeding 90% 70%

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Category Specifics Risk weight first ranking with a loan-to-valuation ratio exceeding 90% but not exceeding 100% 90% first ranking with a loan-to-valuation ratio exceeding 100% 100% Second or subsequent 100% Property development loans (see regulation 17) first ranking security with a loan-to-valuation ratio not exceeding 60% 100% first ranking security with a loan-to-valuation ratio exceeding 60% but not exceeding 100% 100% any other property development loans, including those with second or subsequent ranking security, no security, and first ranking security with a loan-to-valuation ratio exceeding 100% 100% Other loans with qualifying security over land and/or buildings (see regulation 16) first mortgage over land and/or buildings with a loan-to￾valuation ratio not exceeding 70%, excluding property development loans and residential mortgage loans 100% first mortgage over land and/or buildings with a loan-to￾valuation ratio exceeding 70% but not exceeding 100%, excluding property development loans and residential mortgage loans 100% SME retail 75% SME corporate 85% Loans secured over qualifying moveable machinery (see regulation 18) first ranking in respect of which a financing statement has been registered and perfected under the Personal Property Securities Act 1999 and when an identification number is used to describe the collateral with a loan-to-valuation ratio not exceeding 70% 100% Personal loans in respect of which a financing statement has been registered and perfected under the Personal Property Securities Act 1999 100% in respect of which a financing statement has not been registered under the Personal Property Securities Act 1999 100% Other loans (not otherwise contained in Table A, except in a case to which regulation 13(2) applies) where a financing statement has been registered and perfected under the Personal Property Securities Act 1999 100% where a financing statement has not been registered and perfected under the Personal Property Securities Act 1999 100%

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Category Specifics Risk weight
Operating leases Assets in respect of which deposit taker or other borrowing group member (as applicable) is lessor under an operating lease (excluding operating leases over assets that are land and buildings) 100% Equity holdings (not deducted from capital) 400% Other assets 100% _________________________________ 7 August 2026 Stan Christian Acting Director of Prudential Supervision