Australian banks must plan for up to A$6 billion of write-downs and sales of non-core assets to meet capital targets, believes Craig Williams, sell-side equity analyst at Citi Research."Regulatory capital rule changes are likely to spark major bank balance sheet reviews," Williams wrote.His estimate represents three per cent of industry capital, and about one year's worth of retained profits.One APRA measure that will force banks to scrutinise the value of their businesses is the post D-SiB "core equity tier" (CET) ratio, which will be a minimum of nine per cent from January 2016.Changes in the treatment of external debt in wealth management arms will be a factor, reining in any suggestion of excess leverage on bank borrowings."Of the four major banks, NAB and ANZ appear to have the most pressing need for action in order to improve the returns of their franchises and improve regulatory capital levels," Williams said. One context for bank balance sheet reviews will be the period of comparatively low profit growth for banks, in line with diminished confidence, meaning "organic capital generation is unlikely to be as strong in the future as it has been recently," he said.Williams highlighted three areas for potential review: "sale of investments in banking and financial services equity, capitalised software expenses, and wealth management intangibles." He observed that "CBA has been the most active in FY 2014, but it is likely ANZ will be looking to off-load assets as January 2016 approaches."The after effects of bank IT spending will also demand some attention."The build-up of capitalised software assets on the balance sheet has been significant since the GFC [while] the resultant amortisation expense is now hurting EPS growth," he said."We see management teams writing off these assets to assist EPS forecasts especially given there is no impact on CET capital, with NAB a likely first mover," Williams concluded.Continuing a long-running theme centred on its NAB's MLC investment, Williams projected "a re-think on planned profit margins, embedded values and goodwill impairments. This is most pressing for NAB and ANZ, in our view, given the relative size and profitability of their respective businesses."