Moody's says earthquake will lift major banks loan delinquency rates

Moody's says earthquake will lift major banks loan delinquency rates

Credit rating agency Moody's Investors Service says the immediate impact on the country's major banks from the Canterbury earthquake is likely to be a rise in loan delinquency rates.

Moody's said the major banks - ANZ, ASB, BNZ and Westpac - had exposure to Christchurch that was, on average, about 10% of their loan portfolios.

"In this respect, the immediate impact will be a rise in delinquency rates due to disruptions to business and as some individual borrowers face unemployment, or are forced to take unpaid leave," Marina Ip, a Moody's assistant vice president and analyst said.

Overall Moody's said the damage costs resulting from the earthquake will have only limited negative implications on insurers and banks.

Due to "very conservative" reinsurance arrangements, the expected losses retained by general insurers would be minimal with the bulk of the losses covered by the government owned Earthquake Commission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.