(The following statement was released by the rating agency)
SYDNEY, July 10 (Fitch) Fitch Ratings has affirmed Kiwibank
Foreign and Local Currency Long-term Issuer Default Ratings
(IDRs) at 'AA' and
'AA+' respectively. The Outlooks have been revised to Positive.
A full list of
rating actions is provided at the end of this commentary.
Today's rating action
has no impact on the ratings of Kiwibank's covered bonds.
KEY RATING DRIVERS AND SENSITIVITIES - IDRS, SENIOR DEBT AND
The revision of the Outlooks on Kiwibank's Long-term IDRs to
Stable reflects the Outlook change of New Zealand to Positive
from Stable (see
separate Rating Action Commentary published on 8 July 2014).
senior debt and support ratings reflect Fitch's view that it is
subsidiary of New Zealand Post (NZ Post), which, in turn, is a
state enterprise of the New Zealand sovereign (rated AA/Outlook
The agency believes support would likely flow from the sovereign
through NZ Post
to Kiwibank, should NZ Post find it difficult to provide support
addition, NZ Post provides an explicit, unlimited guarantee for
unsecured debt (including customer deposits), except where a
is expressly excluded from the guarantee; i.e. subordinated
debt accounts for almost all NZ Post's debt, with most of this
KEY RATING DRIVERS - Viability Rating (VR)
Kiwibank's VR reflects the bank's improved and more conservative
as well as its sound asset quality which compares favourably
peers. The VR also considers the bank's more sustainable
profitability, improving retail franchise, and its good funding
Nevertheless, capitalisation has remained more moderate relative
despite the continuing improvements. For more details, please
Rating Action Commentary dated 6 May 2014.
RATING SENSITIVITIES - VR
An increase in the bank's risk appetite, significant weakening
in asset quality,
and/or a deterioration in capitalisation may place downward
Kiwibank's VR. Further positive VR momentum appears unlikely in
The rating actions are as follows:
Foreign Currency Long-Term IDR affirmed at 'AA'; revised Outlook
Foreign Currency Short-Term IDR affirmed at 'F1+'
Local Currency Long-Term IDR affirmed at 'AA+'; revised Outlook
to Positive from
Local Currency Short-Term IDR affirmed at 'F1+'
Viability Rating affirmed at 'bbb'
Support Rating affirmed at '1'
Foreign currency senior unsecured rating affirmed at 'AA'
Local currency senior unsecured rating affirmed at 'AA+'
Commercial paper Programme affirmed at 'F1+'
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Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0326, Email:
Additional information is available on www.fitchratings.com
Applicable criteria, Global Financial Institutions Rating
Criteria, dated 31
January 2014, Rating FI Subsidiary and Holding Companies dated
10 August 2012,
and Assessing and Rating Bank Subordinated and Hybrid
Securities, dated 31
January 2014 are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Rating FI Subsidiaries and Holding Companies
Assessing and Rating Bank Subordinated and Hybrid Securities
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