Standard Chartered hit with first S&P downgrade in 20 years
LONDON (Reuters) - Ratings agency Standard & Poor's (S&P) cut its credit rating on Standard Chartered (STAN.L: Quote) for the first time in 20 years on Friday, citing the "tough period" the Asia-focused bank was going through and its weaker credit-worthiness.
S&P cut its long-term issuer credit rating on Standard Chartered Plc to 'A' from 'A+', with a negative outlook -- a move that could make it more expensive for the bank to borrow money.
It was S&P's first downgrade since it assigned Standard Chartered a rating in 1994, which was followed by upgrades in 1995, 2006 and 2011.
It said the bank "is going through a tough period of late" after years of solid growth and strong financial performance.
"We lowered the ratings because we consider the Standard Chartered group's creditworthiness to have weakened when compared with its peers," said S&P credit analyst Joseph Leung.
At 1330 GMT (8.30 a.m. ET), Standard Chartered shares were down 0.2 percent at 938.12 pence, in line with Britain's benchmark FTSE-100 index .FTSE.
The bank has said it expects a second successive fall in annual profits this year, halting a decade of record earnings. Last month it issued its third profit warning of the year after a jump in losses from bad debts.
Its problems have raised the heat on Chief Executive Peter Sands, who has set out a plan to cut costs and restructure the business to kick-start growth.
S&P said it lowered the bank's risk position assessment to 'adequate' from 'strong'. Continued...