Major New Zealand banks' ratings lowered by Moody’s

Friday, 27 May 2011, 6:53 pm
Press Release: ASB Bank

Major New Zealand banks' ratings lowered by Moody’s

Today, Moody’s Investor Services (Moody’s) announced the outcome of their review of the ratings of all major New Zealand banks. This follows a similar review carried out in relation to Australian banks, including ASB’s parent company, the Commonwealth Bank of Australia (CBA).

As a result of the review, ASB Bank’s long-term senior unsecured rating has been lowered from Aa2 to Aa3. The ratings outlook is stable.

This rating adjustment reflects Moody’s view of the Australian and New Zealand banking systems’ structural sensitivity to the wholesale funding market, which is one of the sources of funding for all major banks in New Zealand .

ASB Treasurer, Nigel Annett said “ASB acknowledges the issues raised by Moody’s and we are appropriately focused on maintaining prudent liability levels, including reducing the Bank’s reliance on wholesale funding, particularly short-term borrowings. As at March 2011, only one-third of ASB’s funding was sourced from wholesale markets and we have significantly grown our high-quality local retail deposit base."

“ASB remains in a sound and stable financial position. We are a well capitalised bank with appropriate liquidity levels, and both capital and liquidity are monitored continually, both by us and the Reserve Bank of New Zealand , to reflect any changes in business mix. ASB also continues to benefit from the global strength of our parent company, CBA, which holds a Aa2 rating from Moody's."

ENDS

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