Cuscal Ltd.

The rating outlook on Cuscal is stable. Australia's economic prospects over the next two years are sound despite subdued GDP growth due to elevated interest rates and slowing economies of major trade partners. We forecast unemployment will increase somewhat but remain low in a historical context. We expect modest growth in house prices over the period. Strong immigration-driven population growth along with limited new housing supply should continue to support house prices. We expect Cuscal to remain a systemically important institution to the wider Australian payment system. We forecast that the company will maintain a risk-adjusted capital (RAC) ratio in the 25.0%-25.5% range over the next two years. We also understand that Cuscal intends to remain focused on its current

...Cuscal Ltd. will remain systemically important to Australia's payment infrastructure. In our view, the company will remain embedded in Australia's payment system, as a provider of infrastructure capabilities to Australian authorized deposit-taking institutions (ADIs). As such, we believe there is a moderately high likelihood of extraordinary support from the Australian government in periods of stress, if needed. This will remain so even as Cuscal continues to increase its exposure to non-ADI clientele. Proceeds from the company's recent initial public offering (IPO) will continue to support growth and acquisitions. The payment and settlement sector continues to evolve as customer demand for electronic payments increases and the technological landscape changes. The company has invested in new businesses such as Basiq to manage these trends. Cuscal now has direct access to public capital markets. This will strengthen its ability to raise capital quickly and support its competitive position...

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