Standard Chartered hit with first S&P downgrade in 20 years

LONDON, Nov 28 (Reuters) - Ratings agency Standard & Poor's(S&P) cut its credit rating on Standard Chartered forthe first time in 20 years on Friday, citing the "tough period"the Asia-focused bank was going through and its weakercredit-worthiness.

S&P cut its long-term issuer credit rating on StandardChartered Plc to 'A' from 'A+', with a negative outlook -- amove that could make it more expensive for the bank to borrowmoney.

It was S&P's first downgrade since it assigned StandardChartered a rating in 1994, which was followed by upgrades in1995, 2006 and 2011.

It said the bank "is going through a tough period of late"after years of solid growth and strong financial performance.

"We lowered the ratings because we consider the StandardChartered group's creditworthiness to have weakened whencompared with its peers," said S&P credit analyst Joseph Leung.

At 1330 GMT, Standard Chartered shares were down 0.2 percentat 938.12 pence, in line with Britain's benchmark FTSE-100 index.

The bank has said it expects a second successive fall inannual profits this year, halting a decade of record earnings.Last month it issued its third profit warning of the year aftera jump in losses from bad debts.

Its problems have raised the heat on Chief Executive PeterSands, who has set out a plan to cut costs and restructure thebusiness to kick-start growth.

S&P said it lowered the bank's risk position assessment to'adequate' from 'strong'.

"This reflects our view that the group is no longermaterially less exposed to unexpected losses than peers," itsaid.

S&P said weaknesses at the bank included its complexoperations and the concentration of loans in single borrowers.

It said the bank was well funded and liquid, however, andwas diversified by region and asset class, and that assetquality should "remain steady at worst" in 2015 versus 2014. (Reporting by Steve Slater; Editing by Mark Potter)

Standard Chartered