tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 29th, 10:40AM

Investments

rss
Latest Headlines

TSB gets a ratings upgrade

TSB Bank has had its credit rating upgraded on the back of "very-good asset quality and profitability".

Wednesday, March 19th 2008, 9:16PM
Standard & Poor's has raised the bank's long-term rating from BBB to BBB+. Besides asset quality and profitability S&P says TSB has "above-peer capitalisation and liquidity, and a solid regional franchise."

"Due to its predominately prime-residential mortgage-based book, TSB's loan-book track record is excellent, which has resulted in very low non-performing assets and charge-offs over the past five years," Standard & Poor's credit analyst Shaun Evans said. "However, the bank has limited business diversity, its funding is concentrated, and its risk-management capabilities are still developing."

Earnings have been resilient, benefiting from the higher-than-peers interest margin and good cost efficiency. The bank's low-cost retail funding base underpins its robust net interest margin. The net interest margin for the six months to Sept. 30, 2007 was 2.98%, which compares well with domestic peers, considering TSB's low-risk asset profile. TSB's cost-to-income ratio is very good, and continued to steadily improve over recent years.

Liquidity levels are high and above the peer average. The bank has consistently held more than 30% of its assets in cash and marketable securities, which provides ample liquidity under normal operating conditions and offsets concerns to an extent associated with the short-dated nature of its liability profile. The retail funding capabilities are augmented by TSB's two committed wholesale bank lines from AA rated banks, which provide a moderate level of additional funding support.

The stable outlook on TSB is based on our expectation that the bank will continue to focus on key financial-strength drivers that have contributed to positive ratings momentum in recent times, Evans says.

« No tax write-offs for investorsYour guide to bank bond offers »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com