Outlook on Kiwibank's Fitch credit ratings revised to positive from stable

Fitch Ratings has revised its outlook on Kiwibank's credit ratings to positive from stable on the back of its decision to do the same to New Zealand's sovereign rating earlier this week.

The credit rating agency has affirmed Kiwibank's foreign and local currency long-term issuer default ratings (IDRs) at AA and AA+, respectively. The outlook on both has been revised to positive.

"The revision of the outlooks on Kiwibank's long-term IDRs to positive from stable reflects the outlook change of New Zealand to positive from stable," said Fitch. "Kiwibank's IDRs, senior debt and support ratings reflect Fitch's view that it is a core subsidiary of New Zealand Post, which, in turn, is a wholly-owned state enterprise of the New Zealand sovereign rated AA/outlook positive."

"The agency believes support would likely flow from the sovereign through NZ Post to Kiwibank, should NZ Post find it difficult to provide support itself. In addition, NZ Post provides an explicit, unlimited guarantee for the bank's unsecured debt including customer deposits, except where a payment obligation is expressly excluded from the guarantee; i.e. subordinated debt. Kiwibank's debt accounts for almost all NZ Post's debt, with most of this debt representing retail deposits," Fitch added.

Separately, Fitch recently assigned a long-term issuer default rating of A- to TSB Bank with a stable outlook.

See credit ratings explained here.