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Credit Suisse Group Credit Outlook Adjusted to Negative by S&P Global Ratings

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Credit Suisse Group has recently seen its credit outlook adjusted to negative by S&P Global Ratings. The company’s senior debt has also been adjusted by Moody’s Investors Services. The recent adjustment in both credit outlook and senior debt is a telltale sign that the company’s recent management changes have so far failed to boost investors’ confidence in the bank.

With S&P’s recent revision, the company’s credit outlook has moved from stable to negative. Also, Moody’s adjustment of the company’s senior debt has seen them move to Baa2 from Baa1. Coincidentally, this isn’t the first time that Credit Suisse is getting its credit outlook adjusted. 

In May, S&P Global Ratings lowered the company’s long-term issuer to BBB. At that time, S&P stated that it sees that the company is working to restore its profitability. Unfortunately, things didn’t progress as planned, and S&P had no other option than to turn the company’s credit outlook to negative.

In a statement released on Monday, S&P stated that it is seeing skyrocketing risks that may affect the bank’s stability, adding that the uncertainty following management reshuffling and a lack of a coherent strategy means the company’s profitability will remain weak in the interim. 

Management reshuffling strategy fails

Credit Suisse hasn’t had a great financial year so far, reporting a larger than expected $1.65 billion loss in the second quarter. It should be recalled that the bank announced management reshuffling last week, with asset management chief Ulrich Koerner chosen to replace outgoing CEO Gottstein. 

The company believed the move would help it turn its fortunes around. Added to this intervention, the bank also announced plans to strengthen its subsidiaries, including its Wealth Management, Asset Management, and Swiss Bank businesses. 

Given the recent development in its operations, the bank has seen its shares plummet further. Tuesday’s trading session saw its shares drop by 3.5%. Credit Suisse shares are currently trading at 5.35 francs. 

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