SQP rating – how good is it?

I said in a previous post that I would write about the way that rate the financial institutions that appear on their site.

I need to point out that I’m not a financial expert – I’m just pointing out what I see as some fundamental inadequacies in their rating system.

I also need to declare an interest – I’m an account manager on the RaboPlus account for Click Suite.

So, here’s my personal beef, which in no way reflects the opinions of my employer or my client.

Spot the difference: SQP and S&P.

Do they look similar to you?

The first is the rating given out by (the acronym stands for Strength, Quality and Profitability). The second is Standard & Poors – the respected rating agency that is recognised internationally.

As an example RaboPlus (through it’s parent Rabobank) has a Standard & Poors rating of AAA – the highest rating possible. This rating is higher than the New Zealand government. It’s the only bank in New Zealand to have a AAA rating. None of the major lending institutions (Westpac, National, ANZ, BNZ, ASB…) have a AAA rating…to coin a Kiwibank expression – “…not one, not a sausage…”

What do rate RaboPlus? AAB.

What do rate Westpac, ANZ, BNZ, ASB and National? AAA.

What did rate Bridgecorp only last year? AAA.

Are trying to pull the wool over our eyes by having a rating that looks a lot (a very lot actually) like Standard and Poors? You decide.

And how good is their rating anyway? This from Diana Clement in the NZ Herald:

“…the website has a ranking system that is not the same as a credit rating system. It ranks companies according to their size, not the health of their balance sheets… “

One thought on “ SQP rating – how good is it?”

  1. Also, doesn’t list PSIS and kiwibank’s 1yr term deposits rates of 9%, making ASB’s the only one at that rate. weird.

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