(MENAFN- Trend News Agency)
Credit Suisse Group AG's credit rating has been downgraded to
BBB from BBB+ by Standard & Poors, a blow for the Swiss bank which
reported a first quarter loss and is facing increasing shareholder
unrest following a string of scandals, Trend reports with reference to Reuters .
Its outlook was changed to stable from negative, the rating
Credit Suisse reported a first-quarter loss last month and
launched a management overhaul after racking up billions in losses
during 2021 from failed investments.
Investors voiced their discontent by rejecting the board's
proposal to discharge management from liabilities for the 2020
financial year at the bank's annual general meeting in April.
The bank has been trying to reform its risk management culture
after a series of costly scandals, which have prompted multiple
rounds of management shake-ups, abrupt departures, and internal and
But S&P said a turnaround from scandals such as the Archegos
affair, Greensill and others would not be quick.
Credit Suisse was hit by twin scandals in March 2021, when the
implosion of U.S. investment firm Archegos led to a $5.5 billion
hit and $10 billion worth of its supply chain finance funds (SCFF)
linked to now-insolvent British financier Greensill were shuttered.
It is still working to recoup assets for SCFF investors.
'Although the group is actively working on remediation actions,
we think a lasting change to the risk culture in such a complex
global organization will take time,' the agency said.
'We now think this will be even more difficult in a
deteriorating economic and business environment.'
S&P said it saw see management targets to restore
profitability as ambitious, particularly in view of the management
upheaval and economic uncertainties.
'In our view, the group's risk-return is likely to remain below
that of its key competitors and other highly rated peers, at least
over the medium term,' S&P said.
The ratings downgrade widens the gap between Credit Suisse and
biggest rival, which has an A- rating and stable outlook from
Standard & Poor's and an A+ rating with stable outlook from
Fitch has kept Credit Suisse at an A- long-term rating with a
negative outlook since April 2021.
The downgrade also places Credit Suisse behind U.S. rival Morgan
Stanley, which has a BBB+ rating with positive outlook from
Standard & Poors and an A rating with positive outlook from
British bank Barclays has a BBB long-term rating from Standard &
Poor's with a positive outlook while its 'A' rating from Fitch also
places it above Credit Suisse.
- United States
- Credit Suisse
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