Stock Markets July 23, 2026 10:43 AM

S&P Moves Standard Chartered Outlook to Positive Citing Stronger Profitability and Lower Risk

Ratings agency affirms current credit ratings while flagging a one-in-three chance of an upgrade to the group’s stand-alone profile over 12-24 months

By Derek Hwang
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S&P Global Ratings has shifted its outlook on Standard Chartered PLC to positive from stable while keeping the bank's long- and short-term issuer credit ratings unchanged at 'BBB+' and 'A-2'. The ratings agency pointed to improved profitability, a lower-risk operating model and reduced credit losses as drivers of the move and said there is at least a one-in-three probability that the group’s stand-alone credit profile could be raised to 'a' from 'a-' within the next 12-24 months.

S&P Moves Standard Chartered Outlook to Positive Citing Stronger Profitability and Lower Risk
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Key Points

  • S&P Global Ratings moved Standard Chartered’s outlook to positive from stable while affirming long-term 'BBB+' and short-term 'A-2' issuer credit ratings.
  • The agency cited improved profitability - return on average common equity rose to 11.3% in 2025 from 5.1% in 2021 - and a lower-risk operating model with higher-quality assets.
  • Capital metrics shifted: CET1 fell to 13.4% at end-March 2026 from 14.1% at end-2025; S&P projects a risk-adjusted capital ratio of 9.0%-9.5% over the next two years, and the loans-to-deposits ratio declined to about 51%.

Overview

S&P Global Ratings has revised its outlook on Standard Chartered PLC to positive from stable and maintained the group’s long-term issuer credit rating at 'BBB+' and short-term issuer credit rating at 'A-2'. The ratings agency said the change in outlook corresponds to at least a one-in-three chance that Standard Chartered’s stand-alone credit profile could be upgraded from 'a-' to 'a' over the next 12-24 months.

Profitability and strategic transformation

S&P attributed the revised outlook to the bank’s strategic transformation, which the agency said has strengthened both profitability and the overall risk profile. The group lifted its return on average common equity to 11.3% in 2025 from 5.1% in 2021. Management has set internal targets of at least 15% return on tangible equity by 2028, compared with about 12% in 2025.

Risk profile and credit losses

The ratings agency noted that Standard Chartered has shifted to a lower-risk operating model and now holds higher-quality assets. S&P highlighted a decline in the group’s average credit loss rate to about 0.2% over 2021-2025, down from about 1.0% during 2014-2018. Based on current dynamics, S&P estimates the group’s return on average common equity will rise to about 14% by 2028, up from about 11% in 2025.

Capital metrics and balance-sheet trends

Standard Chartered’s common equity tier 1 (CET1) ratio decreased to 13.4% at end-March 2026 from 14.1% at end-2025. S&P attributed the decline mainly to faster growth in risk-weighted assets associated with business expansion and share buybacks. For the coming two years, the ratings agency expects the group’s risk-adjusted capital ratio to be in the 9.0% to 9.5% range.

The group’s ratio of customer loans to deposits fell to about 51% at end-March 2026, down from about 53% at end-2024, reflecting changes in the funding mix and balance-sheet composition.

Ratings for operating entities and outstanding instruments

S&P also affirmed 'A+/A-1' long- and short-term issuer credit ratings on Standard Chartered Bank in the U.K. and Standard Chartered Bank AG in Germany, both with stable outlooks. In addition, the agency affirmed all long- and short-term issue ratings on the group’s outstanding debt instruments and those of its operating entities.


Conclusion

S&P’s outlook revision reflects stronger profitability metrics, a lower-risk asset base and a materially reduced average credit loss rate. The change signals a measurable chance of an upgrade to the group’s stand-alone credit profile in the next 12-24 months, while the core issuer ratings for the group and its key banking entities remain affirmed.

Risks

  • Capital pressure from faster growth in risk-weighted assets and share buybacks has driven the CET1 ratio down from 14.1% at end-2025 to 13.4% at end-March 2026 - a factor that could affect the bank’s regulatory capital cushions (impacts: banking and financial institutions).
  • While S&P forecasts a risk-adjusted capital ratio of 9.0%-9.5% for the next two years, the downgrade or slower-than-expected improvement in profitability or asset quality could alter expected rating trajectories (impacts: credit markets and corporate funding costs).

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