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Sound investments start with credit ratings

Sound investments start with credit ratings

A lack of public awareness about credit ratings means some New Zealanders could be exposing their investments to unnecessary risk, says the General Manager of RaboPlus, Mike Heath.

“Our own research shows that while people are aware of the fact that credit ratings are important, they assume it is a level playing field, when in fact it isn’t. The reality is that a credit rating is a key indicator of an organisation’s financial security, and that should be uppermost in people’s minds when making a decision about where to invest their money.”

RaboPlus is a division of the Rabobank Group, the only banking group in New Zealand to have a AAA credit rating from Standard & Poor’s and Moody’s, the highest rating available. It has been twice awarded as one of the world’s safest banks (Global Finance Magazine – 2004 and 2005)

Mr Heath says many New Zealanders have invested in finance companies that offer higher interest rates, but they do little research into the company’s credit rating. “And some don’t have a credit rating at all. No matter how high the interest rate, no rate is worth putting your hard earned cash at risk.”

This view is backed by the Chairman of KPMG Banking Group, Andrew Dinsdale, who says “We strongly support the use of an internationally recognised and accepted credit rating standard, for example, Standard &Poor’s or Moody’s. That way, there can be no doubt about what each credit rating means, and comparison of credit ratings between financial institutions will be much easier. Investors can then judge for themselves the level of security offered and the quality attaching to their investments.*”

Mr Heath says customers investing in RaboPlus savings and term deposits get the comfort of a AAA credit rating, and the safest online environment in which to make transactions.

“RaboPlus’online security is one step above that provided by any other New Zealand banks for their retail customers. We are using the most advanced online banking systems available so we can ensure maximum security for our customers’money,” he says.

Mr Heath says RaboPlus’ parent company Rabobank invests heavily in internet security which benefits all divisions of the bank globally.

“Rabobank is Europe's largest internet bank and continually invests in best-in-class internet security from which RaboPlus customers in New Zealand benefit,” he says. “We specialise in savings and investments, it’s all we do, and the safety of our customer’s deposits is paramount.”


[*Source: KPMG Financial Institutions Performance Survey 2006]

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