Moodys downgrades NZ banks

The long-term senior unsecured ratings for ANZ National, ASB, BNZ and Westpac have gone from Aa2 to Aa3.

The rating action follows the 1-notch downgrade of their respective Australian parent banks.

The outlooks on all ratings are now stable.

"The 1-notch downgrade of ANZ National, BNZ and Westpac's reflects the ongoing impact of the challenging economic environment in New Zealand, which has resulted in asset quality metrics continuing to deteriorate -- albeit at a slower pace -- beyond minimum expectations for the banks' ratings at the bottom of the credit cycle," Moodys says.