National Bank Private Banking signs Rapid Ratings
National Bank Private Banking signs Rapid Ratings for
full ratings service
- Rapid Ratings is to provide rating and assessment services for The National Bank of New Zealand’s private banking portfolio
- Rapid Ratings is a new, software-based corporate ratings service that took 10 years to develop, but was only launched earlier this year.
- Its unique software can quickly and accurately provide corporate credit rating and financial health assessments on any company using income statement and balance sheet information.
- Rapid Ratings’ was developed by Dr Patrick Caragata, who is best known in New Zealand for his earlier work in the area of tax reform.
- The company is based in Brisbane and has offices in Wellington and Auckland. It is jointly-owned by Collection House Ltd (2/3) and Dr Caragata (1/3).
- The service will complement the National Bank’s in-house skills by providing independent, unbiased assessments of investments or potential investments.
New corporate ratings service Rapid Ratings Pty Ltd is to provide rating and assessment services for The National Bank of New Zealand Ltd’s private banking division. National Bank is a wholly-owned subsidiary of Lloyds TSB Group in the UK.
Rapid Ratings provides instant global corporate credit rating and investment risk reports to the financial sector, private equity investors and venture capital investors. Aside from growing interest in this new service among investment funds, there is also growing demand by banks for software-based corporate credit rating services globally because of the regulatory changes on capital adequacy being developed by the Basel Committee of the Bank for International Settlements in Switzerland and the deficiencies in the banks’ internal credit rating systems.
Rapid Rating’s Chief Executive, Dr Patrick Caragata, said the National Bank contract - signed on Tuesday 21 August - was an important win for the software-based service, which took 10 years to develop, but was only launched earlier this year.
The National Bank will use the service to help assess and monitor the performance of investments in its private banking client portfolios. Private Banking is a specialised unit within the Bank, which manages customised portfolios for individuals and trusts.
“Rapid Ratings’ service will complement our in-house skills by providing independent, unbiased assessments of investments or potential investments,” Private Banking head Denis Kirkcaldie said today.
Dr Caragata said that having a measure of external independence to the credit management and investment risk process was important to well-run fund managers.
“Rapid Ratings’ unique software can quickly and accurately provide corporate credit rating and financial health assessments on any company using income statement and balance sheet information,” he said. “Rapid Ratings’ technology is based on a scientific econometric and statistical modelling approach which draws on an extensive database of 20 years of data spanning more than a dozen countries. The corporate credit models apply 62 variables to assess the financial health and credit risk status of thousands of public and private companies.”
A major benefit is the speed of the service - once data has been entered, Rapid Ratings can produce a nine-page corporate credit rating report in seconds. More detailed reports take slightly longer.
“Our leading-edge software can also report financial distress up to two-three years ahead of the share price movement and existing rating agencies. An example is the HIH crash last year - a Rapid Ratings report shows that the HIH liquidation could have been predicted in late 1996 and early 1997.”
The Rapid Ratings software was developed by Dr Caragata, who is best known in New Zealand for his earlier work in the area of tax reform. The company is based in Brisbane and has offices in Wellington and Auckland. It is jointly owned by Collection House Ltd (2/3) and Dr Caragata (1/3). Collection House, which has a market cap of A$500 million, is one of the top 200 companies in Australia and operates in the collection and credit reporting business.
“Rapid Ratings is currently pursuing a number of other significant opportunities in Australasia and is working to make its full range of services available on the web,” said Dr Caragata. “We expect to announce a significant number of new clients and other developments in the coming months.
“This is a product for the global market which we believe offers substantial opportunities for Rapid Ratings in areas that the three major international credit rating agencies, Standard & Poors, Moodys and Fitch, have not yet addressed. We are not competing with them. We are opening up new markets.”
Dr Caragata is a Canadian and New Zealand citizen with a background in resource economics, banking, investment analysis, financial analysis, taxation and software development. He is the author of five books, including Business Early Warning Systems: Corporate Governance for the New Millennium, (Butterworths NZ, 2000). He currently divides his time between Brisbane and Wellington.
Dr Patrick Caragata
Rapid Ratings Pty Ltd
(04) 471 0916
025 537 685