S&P places StanChart´s credit ratings under review with negative implications

Standard&Poor´s placed its outlook on Standard Chartered´s long-term credit rating under review for a possible one-notch downgrade on Friday, due to the heightened uncertainty around the lender´s competitive position, its ability to manage risks and recover its profitability over the next two to three years.

StanChart´s weaker performance in the last quarter of 2015, its ongoing transformation and increasingly challenging macroeconomic environment meant there was now elevate were the main drivers behind the decision, the ratings agency said in a statement.

"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.

Sham did believe management was making strides in delivering the strategy set out in 2015.

In S&P´s opinion, the continuing reduction in the group´s risk weighted assest and fourth quarter rights issue had bolstered its capitalisation and reduced some concentrated risk exposure.

Nonetheless, in its opinion it was not clear that the upward trend would continue nor that its capitalisation was now a relative strength.

The outcome of the CreditWatch, which S&P expected to conclude within one month, would also depend on its comparative assessment of the group´s creditworthiness in comparison to its peers.

As of 14:59GMT shares in StanChart were trading up by 6.52% to 424.7p.