ZURICH – The credit rating of Credit Suisse Group AG has been downgraded from BBB + to BBB by Standard & Poor’s, a blow to Swiss banks which reported first-quarter losses and are facing shareholder instability following a string of scandals.
Attitudes have now shifted from negative to stable, the rating agency said.
Credit Suisse reported first-quarter losses last month and launched a management overhaul in 2021 after billions of losses from failed investments.
The bank is trying to reform its risk management culture and turn the page in a series of scandals that have led to multiple rounds of management shakes, abrupt exits, and internal and external investigations.
But S&P says change from scandals like the Archegos affair, Greensil and others will not be quick.
“While the group is actively working on remedial action, we believe that in such a complex global organization, it will take time for a lasting change in the culture of risk,” the organization said.
“We now think it will be more difficult in a deteriorating economic and business environment.”
S&P says it has seen management targets to restore profitability as ambitious, especially in light of emerging management and economic uncertainty.
“In our view, the group’s risk-return may be lower than that of its main competitors and other high-rated peers, at least in the medium term,” S&P said.
(Reporting by John Revel, editing by Louis Heaven)