S&P rating shows Defence Bank can insulate against COVID-19 downturn.

  • Standard and Poor’s (S&P) today retained Defence Bank’s credit rating as BBB | Stable | A2.
  • S&P noted Defence Bank’s very strong capitalisation and growing residential mortgage book.
  • Defence Bank recorded 8% loan growth last year, with 10% expected by S&P for the current year.
  • Capital levels a “key credit strength” and forecast by S&P to continue.
  • Majority of members employed in Defence, insulating Defence Bank from an economic downturn.

Defence Bank says backing from ratings agency Standard and Poor’s (S&P) demonstrates the bank's ability to be nimble and innovative in a crisis, and the benefit of future-proofing the bank for its members.

Chief Executive David Marshall welcomed the decision by S&P to retain Defence Bank’s credit rating as BBB | Stable | A2 and its recognition of Defence Bank’s strong performance in exceptional times.

“S&P’s judgement shows Defence Bank has embraced the once-in-a-lifetime challenges of last year and got on with delivering better outcomes for members.

Their analysis shows we are achieving a sustained period of growth, which is helping more of our members across Australia move into their new homes.

“S&P has noted our stable membership, strong housing book, well-capitalised bank and ongoing prospects for future growth.

“We never wanted to be victims to the impacts of COVID-19, and we embraced the opportunity to accelerate our people-led, technology-enabled strategy.

“Our wonderful people, a number of whom have strong family connections with the Defence community, continue to do the right thing for each other and our members day in, day out – they are not about to let each other or our members down."

The ratings agency recognised the “very strong capitalisation” of Defence Bank, along with a residential mortgage book supported by the “stable serviceability prospects of its member base”.

S&P noted Defence Bank’s 8% loan growth last year that was more than twice that of the banking system, and predicted loan growth would remain above system over the next two years.

S&P also described Defence Bank’s capital levels as its “key credit strength”.

“With these very strong fundamentals and clear strategy, we are well positioned for the future which will involve convincing more Australians to bank with us,” Marshall said.

“S&P has noted our very strong ties to the Defence community, and we are seeking to expand our reach in a considered albeit innovative way.”

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