S&P Global Ratings on Dec. 27 revised the outlook on Switzerland-based Banque Cantonale de Genève to stable from negative while affirming its long- and short-term issuer credit ratings at A+/A-1.
The outlook change follows a similar Dec. 21 action by S&P on the Swiss Republic and Canton of Geneva, and reflects the agency's view that the bank has a high likelihood of receiving extraordinary financial support from Geneva in case of need.
A downgrade of Geneva's ratings or a weakening of the links between the canton and Banque Cantonale de Genève could prompt S&P to lower the lender's ratings.
The bank's ratings could be upgraded if it continues to boost its earnings while containing cost of risks, which will bring its core profitability metrics more in line with those of its cantonal peers. However, S&P said such development could be challenging for Banque Cantonale de Genève in the near term given the current low interest rate environment in Switzerland.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.