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: Thursday, June 13th, 12:06PM

Mortgages

Mortgage Rates Daily Commentary
Tuesday 11 June 2024  Add your comment
Kiwibank facing criminal charges over overcharging customers

The Commerce Commission has filed criminal charges against Kiwibank alleging systemic breaches of the Fair Trading Act. [READ ON]

rss
Latest Headlines

S&P sounds warning to some lenders

Ratings agency Standard and Poor’s has revised its outlook on some banks and credit unions moving their ratings from stable to negative. This means they each could be facing a ratings downgrade.

Friday, May 17th 2013, 10:56AM 2 Comments

S&P says New Zealand’s economic vulnerabilities, including a material dependence on external borrowings, persistent current account deficits, and recent strong growth in house prices, could escalate.

“In our view, this increases the risk of a deterioration in New Zealand financial institutions’ credit qualities.”

It says it may lower the institutions on negative outlook by one-to-two-notches within the next two years if economic vulnerabilities worsen.

“We consider that this risk is heightened by New Zealand’s material dependence on external borrowings and persistent current account deficits, in the backdrop of an uncertain short-to-medium term outlook for the global economic recovery.

“Furthermore, we note recent strong growth in house prices (particularly in Auckland). 

Consequently, we consider that there is an increasing risk that a sharp correction in property prices could occur if there is a weakening in the country's macroeconomic factors.

“For example, should there be a further widening in current account deficit, or a weakening in terms of trade, this could heighten the risk of a sharp depreciation in currency, which may affect confidence in the housing market, particularly if accompanied by a significant rise in unemployment.

“If these were to occur, banks' credit losses could rise materially, given that there was a build-up in housing prices and domestic credit over the period preceding the global financial crisis.”

S&P says that the Reserve Bank’s planned initiatives to manage banking systemic risks could mitigate some of these vulnerabilities.



“We could revise the outlooks back to stable if we consider that the uncertainties around the structural imbalances have abated.”

The institutions affected are:

  • The Co-operative Bank
  • Heartland Bank
  • TSB
  • Credit Union Baywide
  • Credit Union South
  • First Credit Union
  • New Zealand Association of Credit Unions
  • Police and Families Credit Union.
  • S&P’s negative outlook does not reflect deterioration in our assessment of bank-specific credit factors. 



Its outlooks on seven other banks remain unchanged. These include; ANZ, ASB, BNZ, Westpac, Bank of India, Rabobank and Kiwibank.
S&P’s views here remain unchanged reflecting support from their respective parents.

« Mike Pero accusations flyRBNZ confirms macroprudential tools »

Special Offers

Comments from our readers

On 18 May 2013 at 11:03 am John said:
Too often in criticism of NZ's current account deficit there appears to be a lack understanding that whether it is bad or not depends on the use to which the deficit is being put.
If it is being used to build up the country's economic strength then it can be perfectly acceptable. It is questionable whether expenditure on Christchurch's rebuilding falls into this category.
On 22 May 2013 at 1:50 pm Richard the Third said:
S&P's assertion that the property mini boom mainly in Auckland may, if it rapidly cools have a devaluing effect on the NZ dollar.This idea ignores the fact that foreign and expats buyers are a significant force in the market, to me this means a lower NZ dollar will attract more foreign buyers ie more competition - higher prices.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 ▼7.74 ▼7.35 ▼6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 ▼7.09 ▲6.95
SBS Bank Special - 7.14 ▼6.49 ▲6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 12 June 2024 4:04pm

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

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