A review of things you need to know before you go home Monday; TD rate changes, Westpac grumpy, S&P downgrades second tier financials, banks not in Top 10 'most trusted', swaps up, NZD steady

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report today.

DEPOSIT RATE CHANGES
Kiwibank has reduced its 9 month term deposit rate by -10 bps to 3.65%. SBS Bank reduced is cash PIE rate by -20 bps to 1.60%. And BNZ raised its eight month 'special to 3.65% while at the same time cutting its five and six month standard rates. It also cut its one year rate by -10 bps. added +5 bps to its one, four and five year rates. Update: They also advised they will be decreasing the bonus interest on their Rapid Save account by -15 bps from 2.30% to 2.15% (2.20% potential interest) on the 31st May. 

A COST ESTIMATE, WITHOUT FULL DETAILS
In Australia, Westpac says it expects to take a NZ$280 mln profit hit as a result of their government's bank levy. The bank said it was still considering how it would deal with the highly selective cost, noting that the after-tax cost was equal to 9 NZc a share in dividends, or 4.3% of its last full-year dividend of NZ$2/share. At this time, the five banks involved don't know the exact nature of the tax proposed (because it has not yet passed parliament nor can the Aussie Treasury supply the actual details), but Westpac's response is an early estimate based on politician statements, and part of its campaign to push back at the move. How it will impact its New Zealand operations is also opaque. No estimates have yet come from any other of the five banks targeted by the tax.

DOWNGRADES IN AUSSIE ...
Standard & Poors has lowered the ratings of 23 Australian financial institutions including AMP, Bank of Queesland, and Bendigo & Adelaide Bank, saying it is due to the rising risk of a sharp correction in property prices.They say that imbalances identified in the Australian economy continued to build up and that banks and lenders in Australia faced a significant rise in credit losses if such an event were to occur leading to the downgrades. "To reflect the increased risk, we have lowered our assessment of the stand-alone credit profiles (SACPs) of almost all financial institutions operating in Australia." AMP has been cut from A+ with a negative outlook to A with a stable outlook,

... AND SOME ONE IN NEW ZEALAND
Meanwhile locally, S&P has also downgraded F&P Finance almost solely because it is now owned out of Australia by FlexiGroup. "We have lowered our issuer credit rating on New Zealand-based Fisher & Paykel Finance Ltd. (FPFL) by one notch reflecting our opinion that the group credit profile of its Australia-based parent FlexiGroup Ltd. has weakened due to increased economic risks--similar to those faced by other Australian financial institutions," they said. Update: ASB has found its two perpetual preference share issues (A & B) have both been cut by one notch, to BBB-, now barely investment grade.

BANKS NOT IN TOP TEN
The results of the Reader’s Digest annual Most Trusted Brands survey are out, and for the sixth consecutive year, Whittaker’s has been voted Most Trusted Brand of all brands surveyed. Other top-listing brands for 2017 are, in order: Canon, Tip Top, Edmonds, Resene, Air NZ, Mitre 10, Toyota and Sleepyhead. (Whittaker’s features first and second in the top 10 listing due to winning both the iconic, and confectionery categories). No bank made the top ten, but Kiwibank was the highest ranked bank brand followed by ASB and TSB Bank as "highly commended". Harcourts won the Real Estate category, with Barfoot&Thompson and RayWhite as "highly commended". The survey is done by Roy Morgan of 1400 New Zealand adults.

THE IRISH ARE NERVOUS
If you invest through an international exchange traded fund (ETF), the chances are it is based in Ireland. Over US$4 tln in value is. Now the Irish central bank is nervous and wanting to find out more about how wobbles in these derivative funds might affect them. They know about financial crises and want to be prepared this time. They are seeking clarifications on ownership and pricing processes, and clues on how to regulate the sector.

THE CHINESE MAY BE EVEN NERVOUSER
Last week the Agricultural Bank of China took the unusual step of turning to social media to rebut media rumours it was under special scrutiny by the industry watchdog. The bank, one of the nation’s Big Four lenders, admitted the regulator was carrying out a review of its operations, but said the process was "standard and prearranged". You know they are worried when a simple press release wouldn't do. They needed to 'engage' on social media to tamp down the speculation. It is a bank whose assets have grown very rapidly to NZ$4.3 tln - but their financials are very opaque and it is not clear what their equity is. One thing is certain however, they are too-big-to-fail for the Beijing government. A run on them would stress the central government big time, though.

WHOLESALE RATES RISE
Most wholesale rates are up by +2 bps today following Friday's small rise on Wall Street of benchmark rates. The 90 day bank bill rate is lower by -1 bps however at 1.97%.

NZ DOLLAR HOLDING
The NZD is just a little higher today that at this time on Friday at 69.3 USc. On the crosses we are at 93.1 AUc, and 61.9 euro cents. The TWI-5 is at 73.6. The US dollar is struggling in early trading this week, holding near six-month lows against a basket of currencies. Investors are assessing the impact of American political turmoil and a resurgent euro.

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