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S&P reaffirms Kiwibank's ratings, cautions privatisation could see them fall

S&P reaffirms Kiwibank's ratings, cautions privatisation could see them fall

S&P says privatisation could see Kiwibank ratings fall.

International credit rating agency Standard & Poor’s has reaffirmed its ratings on Kiwibank despite speculation the Government may sell a minority stake in the bank and the resignation of CEO Sam Knowles.

However, S&P cautions privatisation of Kiwibank would probably put downward pressure on its credit ratings.

Read S&P's statement below:

Standard & Poor's Ratings Services today said that its ratings on Kiwibank Ltd. (AA-/Stable/A-1+) remain unchanged following speculation about the possible privatization of Kiwibank and also following the recent announcement of the current CEO’s retirement.

Our ratings continue to reflect our expectation that notwithstanding the recent discussion on possible privatization of Kiwibank, the risk of privatization remains low in the medium term. Nevertheless, in our less-likely downside scenario, privatization of the bank would be expected to put downward pressure on the ratings.

The current ratings on Kiwibank are equalized with the bank’s wholly government-owned parent New Zealand Post Ltd. (AA-/Stable/A-1+). The ratings on the bank get a significant uplift from the bank’s stand-alone credit profile due to an unconditional and irrevocable guarantee from the parent.

Consequently, any change in the bank’s ownership--which would likely be accompanied by a dilution in the parent guarantee--would be a possible trigger for rating review. We do not expect any disruption in the bank’s strategy or operations due to the retirement of the CEO. We consider this transition to be a part of an orderly succession.





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