New Zealand's four biggest banks are shrugging off a downgrade to their credit ratings, saying it will have little, if any, effect on their funding costs.
Moody's last week cut the credit ratings of BNZ, ASB, Westpac and ANZ National by one notch, citing a still-weak economy and continued reliance on foreign lenders.
The downgrade followed a similar move on Australia's big four banks.
BNZ Treasurer Tim Maine says market reaction to the Moody's downgrade will be tested as the bank rolls over existing borrowing with investors and, eventually, issues new debt, but he doesn't think there will be any impact on costs.
Mr Maine says the BNZ is taking all the steps it can to reduce its reliance on overseas funding.
The European debt crisis has again raised fears about which global banks could be brought down by toxic debt.
ASB Treasurer Nigel Annett says Australasia's banks aren't in that boat, and are handful of AA rated bank sectors globally. He says investors may see this part of the world as an attractive place to leave their money.
PricewaterhouseCoopers banking partner Paul Skillender says other borrowers with good ratings will benefit first if Europe goes into meltdown, but Australasian banks' strong ratings will still stand them in good stead.
Mr Skillender agrees that banks shouldn't face any major increase in funding costs from the recent downgrade.
He says the Moody's downgrade aligns the banks' ratings with those issued by Standard & Poor's.
And, he says, as investors pick the lowest rating when assessing the banks' creditworthiness, Moody's downgrade effectively means no downgrade at all.
