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House prices set to fall, bank losses to remain low - S&P Global Ratings

The outlook for New Zealand s banking system has improved because of the better-than-expected management of the Covid-19 pandemic, while house prices are set to fall, according to a leading credit rating agency. S&P Global Ratings said the economy had defied predictions of a sharp recession and a slide in house prices through the management of the pandemic and this had cushioned the banking system from an anticipated credit shock. Photo: RNZ / Claire Eastham-Farrelly Given the fact that New Zealand has done an incredible job of containing Covid . and is still continuing to do better than most developed economies of the world, we would say that is certainly a positive economic influence on the banking system, S&P s financial institutions director Lisa Barrett said.

Leading credit agency predicts New Zealand house prices will fall in coming year

We expect house prices to unwind in an orderly manner in the coming year despite prices and transactions soaring in recent months, she said. We anticipate that credit losses at New Zealand banks will remain relatively low at about 0.30 per cent of gross loans and advances over the next two years. Barrett said the banking system s reliance on overseas markets for finance left it vulnerable to periods of economic, financial or liquidity distress, such as a sudden drop in house prices. The New Zealand banking system s relatively low level of customer deposits and its sizeable dependence on net external borrowings remain key ratings weaknesses compared with other banking systems.

Citi puts Australian retail bank up for sale

Citi puts Australian retail bank up for sale
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