DBRS Morningstar cuts Credit Suisse credit rating to 'BBB' (2024)

FAQs

DBRS Morningstar cuts Credit Suisse credit rating to 'BBB'? ›

DBRS cut the bank's issuer rating to 'BBB' as it "continues to report missteps and compliance failures, resulting in a visible weakening of the franchise," and said the holding company's "ability to restore stakeholders' confidence" is concerning.

DBRS Ratings Limited (DBRS Morningstar) downgraded the Long-Term Issuer Rating of Credit Suisse AG (the Bank) to 'BBB' from 'A (low)' and the Long-Term Issuer Rating of Credit Suisse Group AG (Credit Suisse, CSG or the Group), the top-level holding company to 'BBB (low)' from 'BBB (high)'.

Morningstar DBRS uses a letter grade system for its credit ratings. Morningstar DBRS issues credit ratings from AAA (a rating indicates low credit risk) to a C (a rating that indicates increased credit risk).

The scale runs from AAA to D and intermediate ratings of high or low are offered at each level between AA and CCC (for example, BBB (high), BBB and BBB (low)): Investment Grade: AAA, AA, A, BBB (from best quality to adequate quality but somewhat vulnerable to changing economic conditions).

It is known for strict bank–client confidentiality and banking secrecy. The Financial Stability Board considers it to be a global systemically important bank. Credit Suisse is also a primary dealer and Forex counterparty of the Federal Reserve in the United States.

Credit Suisse uses state-​of-the-art systems to ensure your security during an online banking session. These include: Secure login through our SecureSign solution. Strong encryption of data.

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A stock's star rating is driven by its level of expected return. For example, 3-star stocks are those that should offer a "fair return," one that compensates for the riskiness of the stock.

To receive a Morningstar Rating, a fund must have a record of more than three years. Morningstar assigns the Analyst Rating to funds that analysts qualitatively assess, typically through manager interviews and other sources.

When did Morningstar buy DBRS? ›

On May 29, 2019, Morningstar, Inc. announced their acquisition of DBRS in an approximately $700 million cash and stock transaction. The takeover closed on July 2, 2019.

A score of 90 or higher is generally considered to be good, indicating that a company pays its bills early or on time.

Credit Suisse's cash cushions also came under pressure as it was hit by successive scandals, which showed poor risk management practices at the bank. In early 2021, the Swiss lender was hit with losses from dealings with a lender called Greensill amid fraud allegations.

Owing to the inadequate implementation of its strategic focus areas, repeated scandals and management errors, Credit Suisse lost the confidence of its clients, investors and the markets. The resulting high level of withdrawals of client funds led to the risk of immediate insolvency in mid-March 2023.

GENEVA (AP) — The Swiss government Wednesday announced steps to bolster its “too big to fail” rules aimed at avoiding potentially disastrous fallout from banking sector turmoil after woes last year at Credit Suisse before it was taken over by rival UBS.

The top three–Morgan Stanley, Goldman Sachs, and JP Morgan–have separated from the crowd and typically perform better than the best. Now, it is more common to sort bulge bracket banks into three different tiers. Tier 1 includes the "big three" listed above. Tier 2 includes Credit Suisse, Barclays, and Deutsche Bank.

Fitch has also upgraded Credit Suisse AG's Long-Term IDR to 'A+' from 'BBB+'. The Outlooks on the Long-Term IDRs are Stable.

Credit Suisse, the 167-year-old bank and the second-largest lender in Switzerland, is in deep trouble. The bank said it would borrow up to 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank, taking advantage of a lifeline late Wednesday after its stock crashed as much as 30%.