Moody's rates Teachers Mutual Bank A3

Teachers Mutual Bank has prepared the ground for a venture into the term wholesale funding market, with a credit rating from Moody's. The ratings agency has assigned TMB a long-term rating of A3.

TMB already has BBB+ rating from Standard & Poor's. It needs a second rating for repo eligibility with the Reserve bank and to gain access to the term wholesale market.

At the moment 92 per cent of TMB's funding comes from member deposits and the rest from certificates of deposit.

Chief executive Steve James said that, in the long term, the bank would look to add medium term notes to its funding mix.

Since it moved into broker distribution last year TMB has reported strong loan growth.

Moody's has ratings on three other mutuals. Newcastle Permanent is rated A2, Heritage Bank A3 and Victoria Teachers Mutual Bank Baa1.

Standard & Poor's has ratings on 17 mutuals - all at BBB+ or BBB.