Standard & Poor’s Ratings Services puts Standard Chartered on negative watch a few days after bank reports major losses for the year
Standard Chartered is at risk of having its rating cut by Standard & Poor's, it was revealed today.
The ratings agency put the bank on negative watch this afternoon, which means the rating could move downwards the next time it is reviewed.
Standard Chartered Bank previously had a stable outlook on its A+ rating, while Standard Chartered Plc had an A- rating but also had a negative outlook.
"We placed the Standard Chartered ratings on CreditWatch because we expect the recovery in the group's performance to be protracted and see a risk that management may not be able to bolster profitability in view of the weakening operating environment," said Standard & Poor's credit analyst Terry Sham. "However, we note that management is making strides in delivering the group's strategy devised during 2015 and set out in November 2015."
Sham explained that putting Standard Chartered on CreditWatch meant that Standard & Poor's could potentially lower the rating by one notch if it felt there were question marks surrounding the bank's creditworthiness.
Sham continued: "This would most likely happen if we no longer see the group's business position as strong compared with peers'."
On Tuesday, the bank revealed that it had made a loss before tax of $1.5bn (£1.1bn) in its year ended December 2015, down from a profit of $4.2bn in the previous year. The company also confirmed that it would not be paying a final dividend for the year.
At the time the results were released, chief executive Bill Winters remarked that performance for 2015 had been "poor".
Despite today's news, share price in Standard Chartered was trading up 6.1 per cent at 423.1p shortly before 3pm London time.