What is Standard Chartered rating?

Decoding Standard Chartered’s Credit Ratings: A+ and A – What Do They Mean?

Standard Chartered, a global banking giant with a significant presence in Asia, Africa, and the Middle East, often finds itself under the scrutiny of credit rating agencies. Understanding these ratings is crucial for investors, depositors, and anyone interested in the bank’s financial health. This article clarifies the current credit ratings held by Standard Chartered PLC and its banking arm, and explains what these ratings signify.

The two key entities, Standard Chartered PLC (the parent company) and Standard Chartered Bank (the operating banking entity), have received affirmed long-term issuer default ratings from Fitch Ratings, a leading global credit rating agency. This means Fitch has reviewed their financial strength and creditworthiness and issued an assessment.

Fitch’s Assessment:

• Standard Chartered PLC: Holds an A+ rating.
• Standard Chartered Bank: Holds an A rating.

Both ratings carry a stable outlook, indicating that Fitch doesn’t anticipate any significant changes to their creditworthiness in the near future. This stability reflects a consistent level of financial performance and strength deemed sufficient to meet their obligations.

Beyond the issuer default ratings, Fitch also assigns viability ratings. These ratings specifically assess the standalone financial strength of an entity, without considering any potential support from parent companies or external factors. Both Standard Chartered PLC and Standard Chartered Bank maintain a ‘a’ viability rating. This ‘a’ rating further underscores their strong financial foundation and resilience.

What do these ratings mean?

Credit ratings like these are essentially an independent assessment of the risk associated with lending to or investing in a particular entity. An A+ rating is considered high-grade, indicating a very low risk of default. An A rating is also considered investment-grade, signifying a low risk of default, though slightly higher than an A+. The stable outlook adds further reassurance, suggesting a low likelihood of a downgrade in the foreseeable future.

Importance for Stakeholders:

These ratings are vital information for various stakeholders:

• Investors: They help investors assess the risk associated with investing in Standard Chartered’s debt instruments. The higher the rating, the lower the perceived risk, often leading to lower borrowing costs for the bank.
• Depositors: While not directly impacting the safety of deposits protected by government schemes (where applicable), these ratings offer an indication of the bank’s overall financial health and ability to meet its obligations.
• Regulators: Rating agencies provide valuable inputs for regulators overseeing the financial stability of the banking system.
• Counterparties: Businesses engaging in transactions with Standard Chartered will consider these ratings when assessing credit risk.

It’s important to remember that credit ratings are just one factor to consider when evaluating the financial health of a company. A comprehensive analysis requires examining multiple financial metrics and qualitative factors. However, Standard Chartered’s A+ and A ratings from Fitch, accompanied by stable outlooks and strong viability ratings, currently portray a picture of robust financial standing.