Ratings agency affirms A+ rating but flags path to upgrade via new capital rules
Fitch Ratings has revised its outlook on ANZ Bank New Zealand's (ANZNZ) long-term issuer default ratings (IDRs) to positive from stable, while affirming the ratings at A+. Short-term IDRs were affirmed at F1, alongside a shareholder support rating of a+ and a viability rating of a.
The move signals Fitch sees a credible path to an upgrade over the coming years, rather than making an immediate change to the bank's actual rating level.
Business and asset quality holding up
Fitch pointed to ANZNZ's scale as a core strength, noting the bank holds "a market share of above 25% in loans and deposits," which underpins a straightforward business model. Credit risk remains the main exposure, making up 82% of risk-weighted assets in the first half of FY26, though the agency judged this well managed.
On asset quality, Fitch expects the stage 3 (impaired) loan ratio to edge up to around 1.11% by financial year-end 2026 amid a shallow economic recovery and unemployment at decade-high levels, before broadly flattening out in FY27.
Capital and funding metrics were assessed as steady, with the CET1 ratio at 12.7% as at the first half of FY26 and the loan-to-customer-deposit ratio expected to hold near 110%.
Capital rule change is the trigger
The positive outlook is tied to an expected shift in how Fitch calculates support from ANZNZ's parent, Australia and New Zealand Banking Group (ANZ). Fitch said it now "expects to change the anchor rating for ANZNZ's SSR to the Long-Term IDR of its parent... once ANZNZ is permitted to issue loss-absorbing capacity (LAC) instruments" — likely by late 2028.
At present, the rating is anchored to the parent's viability rating rather than its higher IDR, because Fitch judges it "uncertain that ANZNZ's senior creditors would benefit from the protection of the parent's resolution debt buffers" under the current cross-border capital regime. Once New Zealand's capital settings allow LAC issuance to the parent, that uncertainty falls away.
That shift is already working its way through the regulatory process. The Reserve Bank of New Zealand recently opened public consultation on the detailed design of LAC requirements, as part of a wider Crisis Preparedness package under the Deposit Takers Act — and submissions from the banking sector close on 11 September.
For context, the LAC requirement itself is not simply an added cost. Under the RBNZ's final capital-review decision in December, the big four banks were required to hold less going-concern CET1 capital than under the earlier 2019 settings, in exchange for issuing more gone-concern Tier 2 and LAC instruments to their Australian parents.
What could change the outlook
Fitch said the outlook could revert to stable if the RBNZ decides ANZNZ does not need to build LAC buffers via issuance to its parent, though it called this outcome unlikely.
A downgrade of ANZ's own viability rating would also flow through to ANZNZ's rating. Separately, a reduced strategic importance of the New Zealand business to its parent — for instance through a partial sale or weakening cooperation between Australian and NZ regulators — could also weigh on the rating, though Fitch views these particular scenarios as unlikely at this stage.
See the announcement here.
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