- Moody’s Investor Services (Moody’s) affirmed Defence Bank credit rating of Baa1 | Stable | P-2.
- Moody’s notes Defence Bank’s asset quality and home loan book.
- Endorsement follows Standard and Poor’s (S&P) credit rating of BBB | Positive | A-2.
- Member focus and strong financials receive independent third-party recognition.
Defence Bank has welcomed another endorsement of its strong financial position with Moody’s today delivering a Baa1 | Stable | P-2 rating based on the bank's strong asset quality and capitalisation.
Moody’s outlook on Defence Bank's rating reflects “the strong employment stability of a large proportion its borrowers and the subsidies available to them under DHOAS, which significantly support the bank's asset quality”.
Defence Bank Chief Executive David Marshall welcome the announcement.
“This is terrific third-party confirmation of our investment in members and for members.
“Defence Bank has a value proposition that others can’t match, we serve those who protect us.
“Our focus is on serving the needs of the men and women of the ADF and Defence community.”
Moody’s noted this partnership from Defence Bank, pointing out its focus “on lending to current and previous Australian Defence Force (ADF) personnel, who have strong job and income stability and receive subsidies under the Defence Home Ownership Assistance Scheme (DHOAS)”.
In its report, Moody’s found DHOAS also tilts the bank's loan portfolio toward owner-occupied loans with principal and interest repayments, which Moody's considers to be of lower risk than investor loans or interest-only loans.
Moody’s also acknowledged the bank's relatively consistent operating costs will support the bank's ongoing earnings level and stability.
Last week, S&P recognised Defence Bank’s “customer base supports sound credit quality” reflected by the “stable repayment prospects” of its members.
S&P noted Defence Bank’s “very strong capital position”, earning a BBB | Positive | A-2 rating.