Fitch raises outlook for Australia's 'Big Four' banks as economy rebounds

[BENGALURU] Fitch Ratings revised its outlook on Monday for Australia's so-called "Big Four" banks to "stable" from "negative", reflecting signs of the country's economic rebound from its handling of the Covid-19 pandemic.

Australia's economy grew at a faster-than-expected pace in the final quarter of last year and all signs are that 2021 has started on a firm footing too helped by massive monetary and fiscal stimulus. Fitch expects a 4.7 per cent GDP expansion in 2021.

The country's economy has performed better than peers due to low community transmission of Covid-19 together with timely fiscal and monetary stimulus.

The financial profiles of Westpac Banking Corp, Australia and New Zealand Banking Group, National Australia Bank and the Commonwealth Bank of Australia are likely to remain consistent with their ratings over the next two years, Fitch said.

However, the ratings agency warned that risks to the forecast would remain until the vaccination programme is completed. Prime Minister Scott Morrison said on Sunday that vaccination targets would be abandoned after new advice on AstraZeneca shots.

Fitch affirmed all the banks' ratings at A+.

REUTERS