State-owned New Zealand Post and its subsidiary Kiwibank had their credit ratings cut one notch by Standard & Poor's on the group's growing reliance on its banking operations and expectations of dwindling postal revenues.
The credit ratings were cut to A+ from AA-, with a stable outlook, as Kiwibank faces tough competition in the banking sector, and as NZ Post's traditional postal services shrinks and forces the state-owned enterprise to seek revenue elsewhere.
"The downgrade reflects our view of the group's significant contingent exposure to its large and growing banking operations, Kiwibank, as well as our expectation that NZ Post's revenue and earnings will increasingly be focused on the group's more competitive businesses such as parcels, express courier and financial service," S&P credit analyst Adrian Chow said.
"The stable outlook reflects our expectation that NZ Post will continue to reduce costs and improve the efficiency of its mail delivery network to offset the ongoing decline from standard-letter volumes," he said.
S&P put the group's ratings on a negative outlook in February, and in June Fitch Ratings said the pace of Kiwibank's growth plans was a risk to its AA credit rating.