Defence Bank S&P rating shows bright future ahead.

  • BBB Positive A2 S&P Global Rating retained by Defence Bank.
  • S&P notes Defence Bank’s strong relationship with ADF and the Defence community.
  • Result characterised by strong capitalisation.
  • S&P expects risk adjusted capital above 20%.

Defence Bank has retained its rating of BBB Positive A2 by S&P Global Ratings, with S&P noting its very strong capitalisation and a member base with stable debt serviceability prospects.

S&P expects Defence Bank’s “very strong capital position will continue to underpin its credit profile”, underpinned by its position as an approved Defence Home Ownership Assistance Scheme (DHOAS) bank to provide mortgage lending to its core Australian Defence Force (ADF) affiliated member base.

Commenting on the result, Defence Bank Chief Executive David Marshall said it was a very strong endorsement of Defence Bank’s long term prospects, strategy and sustainability.

“Our rating retention from S&P is powerful third party recognition of our relationship with members, our delivery of tailored banking products and service to the Defence community and our overwhelmingly strong prospects for the future.

“As S&P has found, our focus on members from essential Defence services has insulated the business through the COVID-19 pandemic and given Defence Bank strong future prospects no matter the headwinds ahead.

“We take the time to get to know our members and their unique circumstances. It’s worth pointing out that S&P found Defence Bank had no home loan losses or lenders mortgage insurance claims, a trend S&P expects to continue for the next two years.”

S&P described Defence Bank as having a “very strong capital position (which) will continue to underpin its credit profile. Our risk-adjusted capital (RAC) ratio for the mutual bank will likely be stable at about 20% over the next two years”.

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