Kiwibank outlook downgraded
Standard and Poors has revised its credit rating outlook to “negative” for NZ Post and its subsidiary, Kiwibank.
Wednesday, May 22nd 2013, 6:00AM
by Susan Edmunds
It blamed rising economic risks that could affect the bank’s credit standing.
S&P said it had affirmed its ``A+/A-1'' corporate credit and related debt ratings on NZ Post and KiwiBank.
But it said: “At the same time, we revised the outlook on the long-term ratings for both entities to negative from stable.”
It has recently downgraded the outlooks of eight other lenders, including the Co-Operative Bank, TSB and credit unions including CU Baywide, of which Massey University’s Claire Matthews is a director.
The banking studies specialist said the move on Kiwibank had a greater impact than some of the others because Kiwibank was more exposed to the risks S&P had identified, such as the heat in the Auckland property market.
“It’s a bit surprising. None of the other big banks are on negative watch.”
She said none of the big banks had their outlooks downgraded because there was an expectation that their Australian parents would step in to help them. Matthews said she would expect the same to apply for Kiwibank. “It’s odd they don’t expect the same.”
She said the move would not make much difference to bank customers. “At the moment all it says is it’s a possibility in the next two years. It depends on how successful the Reserve Bank is in cooling the housing market.”
The negative outlook represents a one in three chance that the rating could be lowered in the next two years.
S&P said it was likely that the government would help NZ Post if it got into financial distress.
Matthews said ratings agencies were being more conservative since the global financial crisis, because of accusations levelled at them then.
Fitch has rated Kiwibank stable.
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