prices rising and no recovery in dairy prices both pose threats to
New Zealand banks, Standard & Poor says.
ratings agency released a report into New Zealand banks yesterday,
saying a property slowdown could be on the way for Auckland.
analyst for Standard & Poor Nico de Lange said a spike in house
prices would increased the vulnerability of banks to a sharp
& Poor worked from a base case that house prices would stablise
when adjusted for inflation growth.
believe even though house price increases in Auckland remain
elevated, some signs are emerging of a slowdown in the country's
largest city," de Lange said.
prolonged slump in dairy prices was another threat to New Zealand's
banks identified in the report.
lower dairy prices persist, we believe banks would suffer a modest
increase in credit losses, which would moderately cut their profits,"
de Lange said.
& Poor said the profitability of the New Zealand banking system
as of September 2015 remained strong relative to its international
peers as reflected in the New Zealand banks' strong core earnings and
net interest margins.