Standard Chartered share price falls as Moody’s trims lender’s debt ratings

Shares in Standard Chartered (LON:STAN) have lost ground in today’s session, underperforming the broader London market, as Moody’s downgraded the lender’s debt ratings. The rating action is a blow for the company which recently unveiled its first annual loss since 1989.

As of 14:36 GMT, Standard Chartered’s share price had fallen 2.03 percent to 476.25p. The shares are underperforming the benchmark FTSE 100 index which currently stands 0.88 percent in the red at 6,145.08 points. In the year-to-date, the stock has lost 15.6 percent of its value, compared with a 1.49-percent dip in the Footsie.
Moody’s said in a statement today that it had downgraded StanChart’s long-term deposits and senior unsecured debt ratings by one notch from Aa2 to Aa3, as well as the group’s unsecured debt rating from Aa3 to A1. The ratings agency noted that while the Asia-focused bank was implementing a number of initiatives to reduce its credit risk, profitability was likely to remain weak for at least two years.

The comments follow StanChart’s full-year results last month when the bank posted a pre-tax loss of $1.5 billion for 2015, as compared with a profit of $4.2 billion in the prior-year period. The bank also unveiled restructuring charges of $1.8 billion, part of the $3 billion flagged in November.
Moody’s noted that the FTSE 100 group’s capital position and risk profile had improved, and that its liquidity profile remained strong, but cautioned that the extent and pace of improvement in StanChart’s asset quality could be curbed or delayed by slower economic growth in the group’s key markets, continued pressure on commodity prices, and currency volatility.
As of 15:07 GMT, Monday, 07 March, Standard Chartered PLC share price is 473.70p.