Bank rerating offers much more options for Enterprise companies

Some of you may have seen the news by Standard & Poor on 4 Apr 24 (S&P assigns lowest risk to Australian banking industry, re-rates 20-plus banks (bankingday.com)) where they announced a significant re-rating of many Australian banks. This is a pivotal moment and has enormous benefits for most corporates and institutions.

Many corporates have policies in place that prescribes the credit rating of the banks where they can place their investable cash. In many cases, the policies were limited to A Tier or similar rated banks, and historically that meant the Big4 banks and a handful of international banks.

Overnight, the universe of A Tier or similar rated banks practically doubled and now several second tier banks also have A Tier rating, and potentially increasing the number of banks available to invest deposits per policy as and possibly benefiting from higher deposit rates.