About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Sunday, January 19th, 11:09AM
rss
Latest Headlines

Fitch puts Rabobank on negative credit watch

One of the three major international ratings agencies, Fitch has place Rabobank on negative credit watch.

Friday, October 14th 2011, 2:28PM

by Jenny Ruth

Fitch currently rates Rabobank "AA+", one notch lower than the "AAA" ratings Standard & Poor's and Moody's have it on.

The Netherlands-based Rabobank is one of five European banks placed on negative watch and Fitch says any downgrades will be one notch although "it is also possible that certain banks could have their ratings affirmed at current levels."

Rabobank has two NZX-listed capital bond issues, one of $900 million and the other $280 million and a number of other unlisted senior debt issues in New Zealand dollars which total about $4.7 billion.

David Tripe, head of banking studies at Massey University, says even if Fitch does downgrade Rabobank, it will still be one of the most highly rated banks in the world.

"I don't think investors should rush out and slash their wrists. I certainly don't think it's a matter for panic," Tripe says.

Still, the bank's New Zealand arm has been identifying impaired assets within its local business, he says. Rabobank specialises in lending to the rural sector.

Rabobank's disclosure statement for the six months ended June shows a $13.9 million charge against New Zealand profit for bad debts, down from a $35.1 million charge in the same six months a year earlier. It reported a $25 million net profit for the six months, up from $17.2 million in the year-earlier period.

David Speight at Direct Broking says the potential downgrade is unlikely to affect Rabobank's listed debt but it might have an impact for some funds – some funds have rules restricting their holdings to specified credit ratings.

"I would think most mandates would be wider than that," Speight says.

Max Brown, head of fixed interest at Forsyth Barr, says the possible downgrade isn't a complete surprise in the current environment.

"Given what's occurring in Europe, it would be surprising to think the ratings agencies don't adopt a cautious view," Brown says.

At the end of 2010, Rabobank was one of only seven banks in the world rated "AAA" by S&P and Moody's. Fitch rated six banks "AAA" and Rabobank was the only one it rated "AA+".

« Heartland to repay Wrightson bond, contemplates another issueMacquarie to repay 45.02 cents in the dollar on Fortress notes »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 1.75  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
  • Partners Life criticises Vitality
    “bay broker good points but I get the point about premiums increasing when sick. I have Vitality personally and I have qualified...”
    3 days ago by taka dan
  • Don't hold your breath for life insurance reform
    “That's a good observation from @JPHale there. "2% of sales" has even less meaning when you don't know if it's 2% of premiums...”
    3 days ago by Denis
  • Partners Life criticises Vitality
    “I've added Vitaltiy to a number of clients' new covers. I have also sold AIA cover without it. As with all advice it is...”
    3 days ago by BayBroker
  • Don't hold your breath for life insurance reform
    “Having read both the article and the comments I can only agree with what has been said in the comments. Further, I am...”
    3 days ago by BayBroker
  • David Whyte's 5 predictions for 2020
    “@ number 2: LOL - don't hold your breath. And besides, even if they did do it, if someone needs it they should probably already...”
    4 days ago by All hat no cattle
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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