Debt leaves NZ banks vulnerable - S&P

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

Relevant offers

Industries

Massive bridge-building machine named Dennis reaches Auckland Motorway milestone Fletcher gets go-ahead for Ihumatao special housing area Mainfreight posts record annual profit of $88 million The retailers who have taken Dick Smith's place Kiwis well-served in digital world, annual Commerce Commission report finds Fonterra announces next season Farmgate milk price forecast of $4.25kgMS More Wicked Campers slogans banned, behaviour concerns advertising watchdog Shewan Inquiry gets advice on tightening trust regime Competition regulator alleges Vodafone breached Fair Trading Act Proactive stance urged in combating marina pest

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