ZURICH (Reuters) – 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.
The outlook has now been changed from negative to stable, the rating agency said.
Credit Suisse reported a first-quarter loss last month and launched a management overhaul after racking up billions of in losses during 2021 from failed investments.
The bank has been trying to reform its risk management culture and turn the page on a series of scandals, which have prompted multiple rounds of management shake-ups, abrupt departures, and internal and external investigations.
But S&P said a turnaround from scandals such as the Archegos affair, Greensill and others would not be quick.
“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
(Reporting by John Revill, Editing by Louise Heavens)
