Australia’s big four banks have had their ratings upgraded from ‘negative’ to ‘stable’ by S&P Global Ratings in light of the country’s economic recovery.
This was a reflection of Australia being given a AAA rating which, S&P said, was because of the country’s “strong economic recovery”. It added that it had been “quicker and stronger than we previously expected”.
S&P said: “The Government's policy response and strong economic rebound have reduced downside risks to our economic and fiscal outlook for Australia. As a result, we are revising the outlook to stable and affirming our 'AAA/A-1+' long- and short-term local and foreign currency ratings".
It added it did not expect shorter lockdowns in Melbourne, which was currently in an ongoing lockdown, or other areas to “derail” this economic recovery.
Westpac and NAB both announced to the Australian Securities Exchange (ASX) that their current issuer credit rating was AA- long term and A-1+ in the short term, with the outlook revised to ‘stable’.
Commenting, Treasurer Josh Frydenberg, said: “Australia remains one of just nine countries to hold a AAA credit rating from the three major rating agencies.
“Last week’s National Accounts saw the economy increase 1.8% in the March quarter with output now 0.8% above its pre-pandemic level. This is a feat no major advanced economy has achieved and is in contrast to Japan, France, Germany and the UK who all contracted in the March quarter 2021 while the euro area is back in recession.”