I said in a previous post that I would write about the way that www.interest.co.nz 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.
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 interest.co.nz (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 interest.co.nz rate RaboPlus? AAB.
What do interest.co.nz rate Westpac, ANZ, BNZ, ASB and National? AAA.
What did interest.co.nz rate Bridgecorp only last year? AAA.
Are interest.co.nz 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.
“…the website Interest.co.nz 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… “