Kiwibank credit rating outlook upgraded with sovereign
By Paul McBeth
July 11 (BusinessDesk) - 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.
(BusinessDesk)