Government-owned lender Kiwibank has had the outlook on its credit ratings upgraded by Fitch Ratings as a result of its upbeat assessment of the sovereign earlier this week.
Fitch today affirmed the bank's AA foreign currency long-term issuer default rating and AA+ local currency IDR, while upgrading the outlook to 'positive' from 'stable', it said in a statement. The move reflects the new outlook on the New Zealand sovereign rating, which was upgraded to 'positive' on Tuesday due to the government's improving books. Kiwibank is a subsidiary of state-owned enterprise, New Zealand Post.
"The agency believes support would likely flow from the sovereign through NZ Post to Kiwibank, should NZ Post find it difficult to provide support itself," Fitch said. "Kiwibank's debt accounts for almost all of NZ Post's debt, with most of this debt representing retail deposits."
In February, the bank reported a 10 percent decline in first-half profit to $52 million, and has signalled plans to spend $100 million over four years to upgrade its core banking system.
Fitch said the lender's conservative risk appetite and asset quality compare favourably with domestic peers, while noting its capitalisation has remained more moderate relative to other lenders in spite of continuing improvements.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Infometrics economist Mieke Welvaert says net migration may have reached that “peak point”
- The Warehouse boss Nick Grayston discusses the group's future
- Shane Solly on what higher government bond yields mean for local equities
- Professor Andrew Geddis on the rules of engagement for MMP negotiations
- NBR Radio: best of the week ended September 22, with Grant Walker