1 Feb 2012

NZ Post and Kiwibank on negative creditwatch

11:03 am on 1 February 2012

Standard & Poor's has put New Zealand Post and its subsidiary Kiwibank on negative creditwatch.

Domestic mail volumes fell 4.5% in 2011, a trend which the ratings agency expects to continue at a similar rate this year.

It says NZ Post's AA- rating could be lowered in the next two years if the decline in mail volumes accelerates and is not offset by improvements to delivery networks.

S&P also expects the company to become increasingly reliant on more competitive earnings streams, like parcel and express courier deliveries, which add to the risks facing the business.

Standard & Poor's put Kiwibank on watch. While nothing's changed to affect the bank's rating outlook, S&P says it should be equal with that of its parent.

Both NZ Post and Kiwibank are owned by the State.