Global ratings agency Fitch says the federal government’s decision to withdraw the wholesale funding guarantee will have no impact on the credit ratings of Australia’s banks and the stability of the local banking system.

Fitch on Tuesday said the winding back of the guarantee would have “no material impact” on local banks which have been issuing unguaranteed debt for a number of months, and the mortgage securitisation market is re-opening.

But banks’ heavy reliance on offshore wholesale funding markets makes them vulnerable to another significant dislocation in global markets, the agency said in a statement.

“Should a further severe systemic disruption occur, Fitch believes the government would again be willing to take appropriate action to preserve stability,” it said.
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Australia’s major banks are set to retain their double-A long-term credit ratings despite a sharp rise in credit exposures for the two biggest banks during 2008/09.

Global ratings agency Standard & Poor’s (S&P) said the long-term credit ratings of Australia’s major banks will not change in light of the agency’s new framework for assessing capital adequacy.

S&P’s survey of 45 large international banks included Australia’s big four banks and found the average risk-adjusted capital (RAC) score to be more than three per cent lower than the average tier 1 capital ratio.

Capital adequacy levels reflect whether banks have enough funds to cover their credit exposures.
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ING Investment Management (INGIM) is pleased to announce that ING Clarion Real Estate Securities (ING Clarion) - a specialist manager of equity real estate securities, has won the Property category of the 2009 S&P Fund Awards for the third year in a row.

ING Clarion is one of the largest and most experienced portfolio management teams in the world, with one of the longest track records managing global real estate securities. INGIM appointed US-based ING Clarion in 2005 to manage the investment strategy of the ING Global Property Securities Fund (ING GPS Fund).

The ING GPS Fund has maintained a solid performance track record, relative to its peers, throughout the global financial crisis and is also one of the few global property securities capabilities in the Australian market to have a five star rating from S&P in this asset class. Not surprisingly INGIM has continued to see inflows in excess of $600 million from Australian investors for its global property securities offering so far this year.
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Fitch Ratings and Standar & Poors (S&P) Ratings services both published their methodology and assumptions for evaluating residential mortgage-backed securities (RMBS) in November. Look for both services to issue updated ratings over the next few weeks.
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