(Australia) Ratings agency Standard & Poor’s has come out in support of Commonwealth Bank’s ability to transform its service culture over the next three years by affirming the bank’s credit ratings of AA-/Stable/A-1+.”The ratings affirmation implies that CBA can achieve its transformation objectives, although some objectives are likely to be challenging for the bank,” S&P credit analyst, Craig Bennett said.
S&P said moderate deterioration in capital resources caused by the transformation project was tolerable within the current, relatively benign, credit environment.
“S&P believes that elements of the transformation program, including more efficient systems and resources, are important in supporting the bank’s future performance, and the bank is well placed to implement the program,” Bennett said.
Meanwhile CBA head David Murray said during an interview on Australian television that the restructure could lead to a hike in bank fees. He also played down the negative share price reaction in the wake of the restructure announcement, saying the market was “fickle” on earnings growth.