The National Bank has a new investment rating software tool.
The bank has signed a deal with Rapid Ratings, a company established earlier this year which sells a software product that provides in-depth financial appraisals of companies.
It is the bank’s private banking division – which manages clients’ investment portfolios – that will use the software.
“It will enable independent conclusions to be reached on investments such as shares and bond issues," says private banking chief manager Denis Kirkcaldie. "It's basically a series of computer models that will enable us to access outcomes we wouldn't necessarily have come to."
It does that by drawing on a large base of 20 years' worth of financial data, using more than 60 variables which it applies to companies' financial statements.
The Rapid Ratings software has been 10 years in the making, says Patrick Caragata, who developed the software.
Rapid Ratings’ headquarters are in Brisbane and the company has branches in Auckland and Wellington. Australian debt collector Collection House has a 66% stake and Caragata, who has a background in economics, financial analysis and taxation, owns the rest.
Caragata claims Rapid Ratings is not in direct competition with established ratings agencies such as Moodys and Standard and Poors. “We are not competing with them – we’re opening up new markets.”
Denis Kirkcaldie says The National Bank uses international agencies and will continue to do so while using Rapid Ratings, "because we see the two working differently".