‘Aussie’s bank reforms won’t hit rating’
SYDNEY: Two global ratings agencies say the federal government's proposed banking competition reforms will have no impact on banks' longterm credit ratings.
Moody's Investors Service and Fitch Ratings on Tuesday said there were no immediate credit implications for banks and building societies from the government's proposed banking competition reforms.
Patrick Winsbury, Moody's Sydney-based senior vice president, said the proposed package was fairly balanced and likely to have an impact on major banks' credit ratings "over an extended period - if at all".
"Therefore (they will) create limited near-term pressure on the credit profiles of Australia's major banks," he said in a statement.
His comments came after rival Fitch Ratings said the proposed competition reforms would not impact Australian banks' credit ratings.
"From a credit perspective, these initiatives may result in lower fee revenue for the banks although, to the extent allowed by competition, this may ultimately be offset elsewhere (e.g. by raising interest rates)," Fitch said in a separate statement. Moody's said there was still a high potential for extraordinary support to be provided to Australia's banks in times of stress. -PB News