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Credit Union South T/A NZCU South rating raised to ‘BB’
12 December 2014
Credit Union South T/A NZCU South rating raised to ‘BB’ on improved business performance
Ratings agency Standard & Poor’s (S&P) has raised NZCU South’s long-term issuer credit rating to ‘BB’ up from ‘BB-‘. The outlook has been revised from developing to negative.
The change in rating reflects S&P’s opinion that NZCU South management have successfully directed the credit union into a forecast period of positive momentum in both lending and operating revenue growth, in contrast to the declining performance from 2010-2013. Forecast growth in lending and operating growth is anticipated for 2015. S & P believes that much of the improved growth can be attributed to NZCU South’s initiatives to generate more commercially acceptable outcomes in the medium term as the broader operating environment improves, especially as a result of the rebuild activity in Christchurch.
“The focus on growth was achieved through retaining existing member loans and extending lending to new members. This strategy was highly successful with a 15% increase in personal loans for the year ending June 2014,” says Tania Dickie, NZCU South Chief Executive.
The negative outlook reflects concern that strong house price growth in New Zealand and the country's high reliance on foreign debt heighten the risk of a sharp downturn in the broader economic environment, which could subsequently result in a rise in credit losses and a drop in profitability for the broader financial services sector.
About NZCU South
Credit Union
South trading as NZCU South is a 100% New Zealand owned
financial cooperative and is the third largest credit union
in the country. It is a community owned financial services
organisation with an extensive customer base and
personalised service delivery mode. Throughout the South
Island they provide an extensive range of banking, savings,
lending products and ancillary services to members. It has
total assets in excess of $110m, strong savings flow, 21,000
members and 90 committed and experienced staff. www.nzcusouth.co.nz
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