OK, thanks for that PT. What your table is telling us is that assuming equal stability of capital, it is Heartland that has the greater capacity to leverage its existing business for its existing capital base.
This is where the analysis gets a bit chicken and egg. The higher RBNZ capital requirement for HNZ is because HNZ is perceived as having a less stable capital base. However the calculation assumes that the capital base is stable, because the equity base used is a fixed number. So if the Tier 1 capital of Heartland were to change, for the worse or for the better, the RBNZ 12% requirement is still stuck in the immediate historical past. Ultimately the capital requirement for HNZ may approach the 8% of ANZ and Westpac (the optimistic scenario). Then Heartland will be able to leverage their existing capital even more, greatly affecting the ability of Heartland to grow off its current capital base in a positive way.
However, if Heartland has a significant loss of capital, and because it is small that might include the collapse of the property market in Queenstown (for example) that 12% buffer erquirement could suddenly look very close. And those heroic shareholders might face another call on funds.
I guess what I am saying is that on that one raw figure Heartland looks best. But that one figure does not consider the sensitivity of alternate futures that may play out.
SNOOPY