Debt leaves NZ banks vulnerable - S&P

Last updated 14:16 14/11/2012

Relevant offers


Receivers to close seven NZ Pumpkin Patch stores, 57 job losses Cathay Pacific A350, world's newest airliner, lands in Auckland Charges laid in US over India-based phone scam won't stem tide for Kiwis - NetSafe Friends-themed cafe in Singapore causes outrage with $1000 membership The young Kiwis making millions Edendale milk silo collapse cost set to hit $45 million - Mercer Money tool for the blind released by Reserve Bank Software from failed firm Wynyard underpins sex offender register and major police investigations The Warehouse swings pose risk of 'serious injury' Qantas ratchets up excess baggage fees by 75 per cent

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


Special offers

Featured Promotions

Sponsored Content