Heritage Standard & Poor's Credit Rating Affirmed

Heritage Standard & Poor's Credit Rating affirmed

Australia's largest building society, Heritage Building Society Limited has had its Standard & Poor's (S&P) credit rating affirmed at long term rating of BBB and short-term rating of A-2 in recognition of the Society's low credit risk, good risk management framework and low risk appetite.

In its report S&P said the outlook for the Queensland-based building society was stable, and reflected the effective and prudent management of the business during the current economic downturn.

Heritage CEO Mr John Minz welcomed S&P's ratings affirmation and highlighted that the outcome demonstrated Heritage's strength and consistency during uncertain market conditions.

"S&P's announcement reaffirms that Heritage is in a very sound financial position. We have been focused on building a solid platform for future growth and our affirmed rating positions the Society well compared to our peers," he said.

"S&P's rating opinion confirms that Heritage's business profile compares favourably to many other banks and building societies around the globe. As Australia's largest building society Heritage has weathered the storm better than most and has maintained a strong market standing reflecting the strength of our business.

"The confirmation of the Society's credit rating highlights Heritage's ongoing efficiency in the management of our operations, which is underpinned by our mutual structure.

"As a mutual organisation our commitment is to our members, this is what drives our strategy. Our main objective is to provide a superior level of service and offer a competitive proposition to our members.

"According to the latest Roy Morgan customer satisfaction research into Queensland banking institutions, Heritage is delivering on this commitment outstripping our competition including all banks to achieve a satisfaction rating1 for the six months to April 2009 of 91.5%."

S&P attributed Heritage's solid rating to their minimal exposure to lending other than low risk mortgages.

"Heritage's low risk appetite and focus on member benefits and residential mortgages provides support to its credit profile," the S&P report stated.

"Its growth targets are not aggressive and Heritage has refrained from entering the "LoDoc", "No Doc", or high loan-to-value (LTV) ratio segments of residential mortgages."

S&P highlighted that Heritage's risk management framework and information systems are well advanced for a financial institution of its size.

Mr Minz added, "S&P's report has identified the Society's prudent lending as a strength. I believe this prudent business model that has been the foundation of the Society's continuing strong success which is evidenced by the low mortgage arrears rate2 of 0.35% that the Society recorded at 31 December, 2008."

"As Australia's largest building Society, Heritage will continue to put People first as we work hard to provide a superior alternative in the Australian banking and finance sector."

About Heritage
Headquartered in Toowoomba, the heart of the Darling Downs, Heritage is Australia's largest building society with more than $7 billion in total consolidated assets.

With a 134-year history, Heritage provides a full suite of retail and business banking products, insurance and financial planning products and services to members via Heritage products and through alliances with specialist providers.

Heritage members have access to a network of 130 retail outlets throughout south east Queensland, and has broker services in Queensland, New South Wales, Victoria, South Australia and the ACT.

ENDS
For more information please contact:

Elissa Lewis
Heritage Manager Public Relations
0419714204

Klara Vida
Public Relations Officer
0428920266

For further Heritage information go to www.heritageonline.com.au

1 Roy Morgan's survey of Heritage customers who regard the Society as their main financial institution.
2 Percentage of mortgage loans in arrears greater than 30 days.

SOURCE: Heritage Building Society