S&P raises MyState Bank rating to BBB+

In its report, S&P Global Ratings noted that Tasmania-based MyState Bank’s continuing evolution of its risk management practices in recent years has resulted in an improved risk profile for the bank.

“MyState Bank’s strengthened executive team is equipped to manage the risks associated with the bank’s continued accelerated loan growth, which reached 1.4 times that of the Australian banking system as a whole in fiscal 2016,” S&P said.

The negative outlook assigned to MyState Bank’s raised ‘BBB+’ rating is consistent with the moves by S&P earlier this year to revise its outlook on the rating of banks in Australia to “negative”, citing a potential scenario of a one-in-three chance of increasing property prices and private sector debt.

S&P’s base-case re-affirms the expectation that growth in private sector debt and property prices will moderate and remain relatively low in the next two years, and would result in the outlook on the rating of Australian banks being revised to ‘stable’.

MyState Limited’s managing director, Mr Melos Sulicich, said S&P’s decision to raise MyState Bank’s credit rating to ‘BBB+’ is testament to the group’s sustainable growth strategy which is underpinned by contemporary risk management practices and a very strong balance sheet.

[Related: Tasmanian bank launches new digital offering]