Banks and non-banks given clean bill of health

New Zealand's biggest banks and non-bank lenders remain in a robust position despite the pandemic, according to rating agency Standard & Poor's.

Thursday, April 15th 2021

S&P's annual report on the NZ banking system – which includes a review of non-banks Avanti, Liberty and Asset Finance – views the lenders as "stable".

The agency said: "In our view, the economic risk trend for banks operating in New Zealand is now stable. The country's economy is recovering strongly after the Covid-19 pandemic."

S&P noted "limited losses to date" despite the pandemic, and predicted a steady recovery as the economic picture improves. 

"In our base case, we now forecast that the New Zealand banks' credit losses in the next two years will remain at about 0.30% of gross loans and advances, broadly in line with our expected long-term average for New Zealand banks," the agency said.

According to the report, the Government's sweeping housing reforms will lead to an "orderly slowdown" of property prices in the years to come. 

However, the ratings provider said downside risks would remain, "particularly if the policy support measures are unsuccessful".

S&P's team of forecasters say NZ lenders are well-placed to absorb potential credit losses and retain "headroom in their earnings". 

The company has left credit ratings for ANZ, ASB, BNZ, Westpac, Rabobank and Kiwibank unchanged.

Ratings for Avanti, Liberty and Asset Finance were also unchanged, according to the report.

The report also predicted a possible shake-up of the NZ banking landscape due to the Reserve Bank's new capital requirements.

The extra requirements could force other Aussie banks to dispose of their Kiwi subsidiaries, following the lead of Westpac, which has put its NZ business under a strategic review, S&P said.

"Another possible scenario is that the Australian owners decide to allocate less capital to their New Zealand subsidiaries or look to divest their New Zealand operations because of the higher proposed capital requirements, or for other reasons."


On Friday, April 16th 2021 9:47 am Jonny Good Guy said:

you do have to wonder about the world. S and P said this in 2007 and look what happened.

Heartland Bank - Online 1.85
The Co-operative Bank - First Home Special 2.09
HSBC Premier 2.19
Kiwibank Special 2.19
TSB Special 2.19
SBS Bank Special 2.19
ANZ Special 2.19
ICBC 2.25
The Co-operative Bank - Owner Occ 2.25
Kainga Ora - First Home Buyer Special 2.25
AIA 2.25
ICBC 2.35
Heartland Bank - Online 2.35
HSBC Premier 2.45
SBS Bank Special 2.49
TSB Special 2.55
BNZ - Classic 2.55
Kiwibank Special 2.55
The Co-operative Bank - Owner Occ 2.59
AIA 2.59
Westpac Special 2.59
ASB Bank 2.59
ICBC 2.99
China Construction Bank Special 2.99
HSBC Premier 3.19
Kainga Ora 3.37
TSB Special 3.39
AIA 3.39
ASB Bank 3.39
Bluestone 3.54
Resimac 3.54
The Co-operative Bank - Owner Occ 3.54
Select Home Loans 3.54
ASB Back My Build 1.79
Heartland Bank - Online 1.95
Resimac 3.39
Kiwibank Special 3.40
Kiwibank - Offset 3.40
Kiwibank 3.40
Select Home Loans 3.49
Bluestone 3.49
ICBC 3.69
The Co-operative Bank - Owner Occ 4.40
The Co-operative Bank - Standard 4.40

More Stories

Details emerge of property investor tax exemptions

Friday, June 11th 2021

Details emerge of property investor tax exemptions

Consultation opens today on how new builds will be exempted from investment property tax changes, in rules to be in place by October 2021.

Market starting to cool

Wednesday, June 09th 2021

Market starting to cool

While the number of residential building consents issued continues to break records there are not enough houses for sale and consequently new rentals coming to the market.

Treasury’s house price claims debunked

Tuesday, June 08th 2021

Treasury’s house price claims debunked

The chances of Treasury’s predictions average house prices will only rise 0.9% in the year to June 2022 being correct have been deflated by independent economist Tony Alexander.

Five ways clean tech can make commercial buildings energy efficient

Monday, June 07th 2021

Five ways clean tech can make commercial buildings energy efficient

As corporate commitments to net-zero carbon targets gain momentum, there is a growing focus on the energy efficiency of buildings – and the technology that can make a difference.