All of the four Australian banking groups have wealth management operations.

One of the “Big Three” rating agencies has cut ratings on Australia’s four largest banks and subsidiaries in New Zealand because of the expected blow from steps to handle the COVID-19 pandemic. The downgrades by Fitch Ratings were to “A+”/”F1” from “AA-“/”F1+”.

The rating cuts affect the following Australian institutions: Australia and New Zealand Banking Group; Commonwealth Bank of Australia; National Australia Bank and Westpac. Their New Zealand-based businesses were also affected.

Fitch said it predicts that Australia and New Zealand's gross domestic product will shrink in the first half of this year and recover modestly in the second half of this year, extending into 2021. These conditions will hit earnings and the banks’ asset quality.

Some firms will not restart and people will struggle to resume paying off loans, Fitch said. 

Banks’ efforts in recent years to bolster their capital buffers will provide some support, the agency said.