Standard Chartered has had its credit rating downgraded for the first time in 20 years, with Standard & Poor’s, the ratings agency, saying that the bank, which makes about 90% of its income and profits in emerging markets, was going through a tough period.
The London-listed bank has issued three profit warnings in 12 months, putting pressure on Peter Sands, its chief executive, who has presided over consecutive years of growth – even during the banking crisis.
Until now, S&P has only ever upgraded its assessment since it began rating Standard Chartered in 1994.
As it cut the rating from AA minus to A plus, however, the agency said the bank’s creditworthiness was weakening in comparison with its peers.
“We still consider [the bank] to be among the most creditworthy commercial banking groups globally,” S&P said. “The … group is going through a tough period of late, after many years of solid growth and strong financial performance.”
Sands and his management team spent three days this month trying to assuage the concerns of investors at a series of meetings in Hong Kong.
Some investors have said they are concerned that the bank might need to raise more capital.
The bank’s shares are hovering at five-and-a-half-year lows and were little changed after the downgrade.
