S&P revises view on Credit Suisse entities to negative

S&P said it revised its outlooks on Credit Suisse group entities to negative from stable while affirming the A+/A-1 ratings on Credit Suisse AG and other core operating subsidiaries, and our BBB+ ratings on Credit Suisse Group AG.

“The negative outlooks on all entities reflect our view that potential material losses may stem from deficiencies in the group's risk management system or risk appetite that are not reflected in the current ratings,” S&P said in a news release.

Earlier this week, Credit Suisse Group AG announced it may incur a material loss relating to prime brokerage exposures to a U.S. hedge fund that defaulted on margin calls.

“We believe Credit Suisse can manage potential financial losses due to its strong capitalization and robust underlying earnings, but the incident raises questions about the quality of risk management, the group's risk appetite, and adequacy of the risk return profile,” S&P said in the release.

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