German HSH Nordbank to ditch ratings agency S&P: bank

The troubled German regional bank HSH Nordbank will ditch international ratings agency Standard and Poor’s for financial reasons, the bank said on Monday.

HSH Nordbank will remain under contract with two other ratings agencies, Moody’s and Fitch, a statement said, dropping the one that gave the bank its worst rating last year.

S&P downgraded HSH’s long-term debt from A to BBB-plus in May 2009, making it more difficult and more expensive for the German bank to obtain financing on capital markets.

“We have always had better relations with the other ratings agency,” an HSH spokesman told AFP.

S&P later said it was “withdrawing our counterparty credit ratings on HSH and all the issue ratings on HSH’s debt at the bank’s request,” adding that its outlook on HSH had been negative before the withdrawal.

The agency also affirmed its pre-withdrawal BBB-plus rating on the bank.

Germany’s publicly owned regional banks are considered the sector’s weak link, and HSH is in the midst of a broad restructuring of its activities.

It does not expect to post a profit before 2011, following net losses of almost 680 million euros (830 million dollars) in 2009 and 2.8 billion euros in 2008.

The end of relations with S&P comes against a background of increasing scepticism in Europe about ratings agencies, which have been criticised for adding to government’s problems during the eurozone debt crisis.