Business

Ratings of NZ banks confirmed

09:05 am on 19 March 2013

Fitch Ratings has affirmed the credit ratings of the country's four main Australian-owned banks.

The international credit rating agency left the AA- rating in place for ANZ, ASB, Bank of New Zealand and Westpac.

Fitch says that reflects the extremely high likelihood of support, if required, from their parent banks, as well as the Reserve Bank and the Government.

The banks have reported strong profits in recent years, mainly due to fewer bad debts, while tougher rules have reduced their dependence on short term overseas funding.

Fitch says the drought could affect the ability of farmers to repay debt, which could hurt banks' profitability.

It also says rising house price inflation and an increase of loan to value ratios of more than 80% could also affect asset quality.