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Winters's Overhaul of Standard Chartered Sparks Fitch Downgrade

  • Rating firm cuts credit grade one notch to A+ from AA-
  • Fitch cites poor `profitability and asset quality trends'
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Fitch Ratings downgraded Standard Chartered Plc, citing “unfavorable profitability and asset quality trends,” two days after the lender unveiled plans to tap investors for $5.1 billion, eliminate thousands of jobs and cut risky assets across Asia.

While Chief Executive Officer Bill Winters’s measures to restructure the lender and boost its capital buffer “address several aspects” that had previously been considered “negative rating factors,” implementing the plan “could be challenged by headwinds from further downturn in the credit cycle as well as high management and staff turnover,” Fitch said in a statement. The ratings firm on Thursday cut the lender’s credit rating one grade to A+ from AA-, with a negative outlook.