WELLINGTON, March 10 (Reuters) - Ratings company Moody’s said on Thursday that the fall in milk payouts was credit negative for New Zealand banks.
“The decline is credit negative for New Zealand banks because a lower payout reduces the income that farmers receive, thereby threatening the asset quality of banks exposed to the dairy sector,” said Daniel Yu, vice-president senior analyst at Moody‘s, in a written statement.
The ratings agency said that ANZ, ASB and BNZ were the most exposed to the country’s agricultural sector.
Global dairy giant Fonterra Co-operative Group Ltd on Tuesday lowered its forecast payout for its farmer shareholders, adding to pressure on New Zealand’s beleaguered dairy sector.
Reporting by Charlotte Greenfield; Editing by Stephen Coates