BREAKING NEWS
All Blacks hammer Wales, winning 46-6
Close

Debt leaves NZ banks vulnerable - S&P

JAMES WEIR
Last updated 14:16 14/11/2012

Relevant offers

Industries

Pound falls to 30-year low against US dollar amid anti-global sentiment Maersk shipping line changes NZ route Revamped Smith's City pushes into profitable Auckland International hotel Sofitel Wellington fights $350k development fee - and succeeds Taranaki engineers need to 'get creative' to survive Fiat Chrysler accused of concealing defect in Jeep Grand Cherokee Countdown harnessing the skills of older workers Duncan Garner: Tax the tourist tsunami and give us citizens a break APN settles New Zealand tax dispute with Inland Revenue Trade Me says online gun auctions are safe, as police union calls for an end to sales

New Zealand bank credit ratings are “robust” by international standards, and the outlook is stable for all the banks, according to ratings agency Standard & Poor's.

But the international credit rating agency said the banking system remained vulnerable to “external pressures”.

Despite sound and relatively stable ratings since the global financial crisis hit four years ago, the banks have had to navigate through a range of domestic and overseas issues that had “brought on downward rating pressure for the banking system”.

All the big, Australian-owned banks have strong “AA minus” stable credit ratings, including ANZ, ASB, BNZ and Westpac.

Similar to Australia, New Zealand's private sector is “highly indebted” S&P said, leaving it vulnerable to a downturn in global economic and financial market conditions.

“A severe downturn could result in downward pressure on a bank's stand-alone issuer credit rating, “S&P said.

But underpinning the present stable outlook was a rise in household savings relative to income levels and a fall in the appetite for debt, the credit rating agency said. That reduced the vulnerability of households to a worsening economy.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content