Scandal-stricken lender Credit Suisse has been hit with a downgrade by credit rating firm Standard & Poors after slumping to a loss in the first quarter of the year.
S&P downgraded the firm to BBB from BBB+, while its outlook was changed from stable to negative.
Credit Suisse reported a first-quarter loss last month and has launched a management refresh after being hit by billions in losses by a string of scandals, including the collapse of Archegos Capital and Greensill Capital.
The collapse of Archegos left Credit Suisse with a $5.5bn hit, and the collapse of Greensill shortly after caused it to shutter $10bn worth of its supply chain finance funds, which it is still scrambling to recover for investors.
S&P said the firm now faced a long turnaround effort.
“Although the group is actively working on remediation actions, we think a lasting change to the risk culture in such a complex global organization will take time,” the agency said.
“We now think this will be even more difficult in a deteriorating economic and business environment.”
The agency said targets set out to restore profitability were ambitious against the worsening economic backdrop.
“In our view, the group’s risk-return is likely to remain below that of its key competitors and other highly rated peers, at least over the medium term,” S&P said.
S&P’s main rival Fitch has kept the lender at an A- rating witha negative outlook since April 2021.