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S&P, Moodys downgrade Kiwibank’s rating

Both Standard & Poors and Moody’s have downgraded Kiwibank’s credit rating in response to the expiry of a guarantee following ownership changes last year.  

Wednesday, March 1st 2017, 4:47PM

Once 100% owned by NZ Post, as of late last year Kiwibank is now owned by NZ Post, ACC and the NZ Super Fund.

Today’s move from the credit agencies was prompted by the expiry of an unconditional guarantee on Kiwibank’s payment options from its majority owner, NZ Post.

S&P has lowered the long-term issuer credit rating on Kiwibank to 'A' from 'A+' and affirmed the short-term issuer credit rating at 'A-1'.

Its long-term issuer credit rating on Kiwibank now incorporates three notches of uplift above the bank's stand-alone credit profile.

S&P credit analyst Andrew Mayes said this is because Kiwibank is highly likely to receive extraordinary support from the New Zealand government, if needed.

“This is because we consider that Kiwibank plays an important role to the New Zealand government and that the bank has a very strong link to the government as a result of its indirect ownership by the government.”

Mayes said the stable outlook on Kiwibank reflects their expectation that the bank will retain its focus on relatively lower-risk residential lending while maintaining its risk-adjusted capital ratio above 10%.

“It also reflects our expectation that the bank's current market position and funding profile will remain largely unchanged over the next two years.”

Moody's downgraded Kiwibank’s long-term issuer and deposit ratings to A1 from Aa3, but said the rating outlook is stable.

In a statement, the agency said the rating downgrade is a direct result of the removal of the NZ Post guarantee which they believe has introduced some uncertainty about the potential for parental support.

However, it said it believes that Kiwibank will continue to benefit from a very high likelihood of government support, given that it will remain indirectly owned by the government.

“Kiwibank's position as the key domestic player in the New Zealand banking system and its position as a government-owned bank also support Moody's view that there is a very high probability that it will receive government support -- via its government-owned shareholders -- in case of need.”

Tags: Kiwibank

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.49 6.49 6.49
TSB Special 7.89 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.02 5.79 5.69

Last updated: 20 November 2024 9:45am

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