'People's Bank' to rate with the big boys

The company says it expects to be given an AA- credit rating by international rating agency Standard & Poor's, effective from when it receives its banking licence from the Reserve Bank.

Interim CEO for the new bank, Sam Knowles, says the rating will put the bank on a par with ANZ (NZSE: ANZ), ASB Bank, The National Bank and Westpac Banking Corporation (NZSE: WPT).

"In determining the rating for the new bank, Standard & Poor's considered detailed information, including our business implementation plans, financial projections and capital requirements, and met with the bank's management team and senior New Zealand Post executives.

"The long-term rating confirms that customers of the new bank can have confidence that it will be a strong and credible presence in the New Zealand banking sector."

Standard & Poor's says the rating will match that of the bank's parent, New Zealand Post.

"This expectation is reliant on New Zealand Post Financial Services (NZPFS) successfully gaining a New Zealand banking licence and the execution of an unconditional guarantee from New Zealand Post covering all obligations," the ratings agency says.

"The guarantee and ongoing commitment from New Zealand Post will be a key determinant of the rating assigned to NZPFS."

S&P says demand for the establishment of a domestically owned bank in New Zealand appears evident but the venture's success depends on effective risk management and attracting suitable customers.

New Zealand Post chief, Elmar Toime, says the rating announcement is a further endorsement of the banking strategy and its ability to add significant value to the business and its shareholders.

Former Prime Minister, Jim Bolger, was recently named to chair the new bank. Although S&P refers to the bank as New Zealand Post Financial Services, the bank is yet to be officially named.

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