Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


S&P sees stable bank asset quality as interest rates rise

NZ banks expected to maintain sound asset quality as interest rates rise, S&P says

By Tina Morrison

Feb 13 (BusinessDesk) – New Zealand banks should be able to absorb any bad loans from borrowers under pressure as interest rates start climbing this year, maintaining their sound asset quality levels, Standard & Poor’s Ratings Services said in its 2014 outlook for the New Zealand banking sector.

New Zealand’s central bank is this year expected to start hiking interest rates for the first time in almost four years, starting next month and continuing through 2015. The country’s benchmark interest rate has been on hold at a record low 2.5 percent since March 2011 as the central bank sought to stimulate activity through cheap credit. Rates were last raised in July 2010.

“We expect mortgage interest rates to increase in 2014,” Standard & Poor’s said in its 2014 outlook. “Banks in New Zealand should be able to absorb such increases at the current rating level, noting that borrowers with stretched debt positions could experience debt-serving problems.”

The credit rating agency forecasts asset-quality levels for the New Zealand banking system will remain sound at around their current levels with non-performing loan levels and credit losses remaining flat after peaking at about 2.1 percent and 0.8 percent in 2009 to 2010 respectively following the global financial crisis.

Still, S&P said persistent house price inflation could heighten the risk of a sharp property price correction in the future. It expects central bank measures to limit high-debt mortgage lending may have a dampening effect on house price inflation, while rising mortgage interest rates and a pickup in housing construction should also reduce pressures.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Oil: 2014 New Zealand Petroleum Summit

Simon Bridges: Our abundance of energy and minerals resources provides us with unique opportunities to build the New Zealand economy.

Over the past three years the Government has made significant changes to how the sector is regulated. More>>

ALSO:

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news