Credit Suisse Group AG’s credit outlook was cut to negative by S&P Global Ratings and its senior debt was downgraded by Moody’s Investors Services, in a sign that management changes announced last week are failing to shore up investor confidence.
S&P revised the outlook to negative from stable, while Moody’s downgraded the lender’s senior unsecured debt to “Baa2” from “Baa1.”
S&P already lowered Credit Suisse’s long-term issuer to “BBB” in May, saying that it sees management targets to restore profitability as ambitious.
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“We see increasing risks to the stability of the bank’s franchise, uncertainty around the reshuffling of top executives and a lack of a clear strategy, and we think the group’s risk-adjusted and absolute profitability is likely to remain weak over the medium term,” S&P said in a statement on Monday.
Credit Suisse posted a larger-than-expected 1.59 billion Swiss franc (US$1.67 billion) loss for the second quarter, underscoring the Swiss firm’s challenges in exiting its worst slump since the financial crisis.
The lender announced that Ulrich Koerner, 59, would replace Thomas Gottstein as CEO in an effort to steer the bank back to profitability.
S&P said it affirmed its “A/A-1” long-and short-term issuer credit grade on Credit Suisse AG, the principal operating bank of the Credit Suisse group, and the group’s other core subsidiaries.
It also affirmed its “BBB” long-term issuer credit rating on Credit Suisse Group AG.
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