Credit Suisse's Ratings Affirmed By Moody's, Outlook Stable

Moody's Investors Service — a rating arm of Moody's Corporation (NYSE:MCO) — affirmed the ratings of Credit Suisse (SIX:CSGN) Group AG (NYSE:CS) . The banking giant’s Baa2 senior unsecured debt ratings were affirmed along with its principal bank subsidiary, Credit Suisse AG’s A1 long-term senior unsecured debt and deposit ratings.

The bank’s baa2 baseline credit assessment (BCA), baa2 adjusted BCA and A1(cr)/P-1(cr) Counterparty Risk (CR) Assessment were maintained too, along with all the long and short-term ratings.

Further, all of the company’s subsidiaries’ senior unsecured debt, issuer and deposit ratings were also affirmed.

The rating firm’s outlook for the bank remains “stable.”

Rationale Behind the Affirmation

As Credit Suisse’s three-year restructuring program is nearing the end, Moody’s believes that the bank will experience some burden as a result of de-risking and business re-alignment in 2018, which will put pressure on its profitability. Thus, even though the company’s performance remained solid, outlook remained unchanged. Also, pressure on profitability is anticipated as the disposition of the non-core assets continues.

However, Moody’s expects the company’s profitability to be benefited as a result of the reduction in expenses. Further, steady earnings provide support to the ratings. Also, despite the regulatory pressure, Credit Suisse is likely to maintain its capital position.

The outlook reflects a robust capital position, decent management of risk and sound liquidity position.

Credit Suisse currently carries a Zacks Rank #5 (Strong Sell). Its stock has lost around 11.7% over the last three months, compared with 6.7% decline recorded by the industry.

Stocks to Consider

BanColombia S.A. (NYSE:CIB) carries a Zacks Rank #2 (Buy). Its earnings estimates for 2018 have been revised 7.3% upward over the last 60 days. Also, its shares have gained 14.6% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) carries a Zacks Rank of 2. In the last 60 days, the Zacks Consensus Estimate for the company jumped 1.2% for the current year. Its share price has gained 40.4% in the past year.

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