S&P Upgrades Saxo Bank's Credit Rating: Broker Scores A-

by Damian Chmiel
  • The rating agency updates Saxo's rating from BBB due to the solid profitability.
  • A- is one of the seven highest ratings awarded by S&P.
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The Denmark-based Saxo Bank has been awarded an “A-“ long-term issuer credit rating by S&P Global Ratings, marking an upgrade from its previous “BBB” rating.

According to the company, the stable outlook accompanying the rating is a testament to its “solid operating profitability, robust capitalization, and effective risk management practices.”

Saxo Bank Secures A- Credit Rating from S&P Global Ratings

The credit rating upgrade follows Saxo Bank's designation as a Systemically Important Financial Institution (SIFI) last year. The bank has taken proactive steps to enhance its financial resilience and align with regulatory requirements for SIFIs, including increasing its resolvability and bolstering its subordinated debt buffers.

"This rating upgrade by S&P Global Ratings serves as a testament to our unwavering commitment to financial resilience and prudent risk management ,” said, Søren Kyhl, the Deputy CEO & COO of Saxo Bank.

According to S&P Global Ratings definitions, an “A-“ credit rating on the global scale indicates that an obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to adverse economic conditions and changes in circumstances than compared to obligors in higher-rated categories.

“We are pleased that our enhanced credit rating reflects our efforts to further bolster our financial robustness, which is in alignment with our designation as a SIFI,” Kyhl concluded.

The rating change comes after Saxo Bank published its financial report for 2023 a month ago. The report showed an increase in the number of investors to 1.15 million and an operating income of DKK 4.48 billion, which modestly rose from DKK 4.45 billion reported the previous year.

How S&P Ratings Work?

S&P ratings provide a relative ranking of overall creditworthiness. They assess the ability and willingness of debt issuers, such as corporations or governments, to meet their financial commitments in full and on time.

Ratings may be changed, suspended or withdrawn at any time as the issuer's financial situation evolves. S&P publishes annual default and transition studies showing the performance of their ratings over time.

  • S&P uses letter scales to provide a common, transparent language for comparing creditworthiness:
  • Long-term credit ratings range from AAA (highest) to D (default)
  • Ratings from AA to CCC may have + or - signs to show relative standing
  • Short-term ratings range from A-1 (highest) to D
Source: Wolfstreet.com
Source: Wolfstreet.com

There are also special-purpose ratings for things like funds, using different symbols.

Saxo’s New COO and Lower FX Demand

In late March, Saxo announced the appointment of Tara Tyan as its new Chief Operating Officer (COO) for the MENA region. Tyan, who has been with the company for approximately six years, was promoted internally to this key leadership position.

With a wealth of experience in the forex and CFDs industry, Tyan brings valuable expertise to her new COO role. Before joining Saxo Bank, she held various positions at prominent brokers. In June 2013, Tyan began her career in the industry as a Regional Marketing Manager at Easy Forex, where she spent a year honing her skills. She later served as the Global Events Manager at FXPro for ten months and as a Senior Marketing Manager at Equiti for six months.

Tyan's appointment comes at a time when Saxo Bank is experiencing fluctuations in its monthly forex trading volumes. According to a recent report by Finance Magnates, the bank's forex trading volume on its platform decreased significantly in February, dropping to $92.4 billion from $106.7 billion in the previous month. This represents a month-over-month decline of 15.4 percent.

Notably, February marked the first time in two years that Saxo Bank's overall monthly forex volume fell below the $100 billion threshold. The last time the company recorded a lower monthly forex volume was in December 2021, when it posted $95.7 billion.

The Denmark-based Saxo Bank has been awarded an “A-“ long-term issuer credit rating by S&P Global Ratings, marking an upgrade from its previous “BBB” rating.

According to the company, the stable outlook accompanying the rating is a testament to its “solid operating profitability, robust capitalization, and effective risk management practices.”

Saxo Bank Secures A- Credit Rating from S&P Global Ratings

The credit rating upgrade follows Saxo Bank's designation as a Systemically Important Financial Institution (SIFI) last year. The bank has taken proactive steps to enhance its financial resilience and align with regulatory requirements for SIFIs, including increasing its resolvability and bolstering its subordinated debt buffers.

"This rating upgrade by S&P Global Ratings serves as a testament to our unwavering commitment to financial resilience and prudent risk management ,” said, Søren Kyhl, the Deputy CEO & COO of Saxo Bank.

According to S&P Global Ratings definitions, an “A-“ credit rating on the global scale indicates that an obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to adverse economic conditions and changes in circumstances than compared to obligors in higher-rated categories.

“We are pleased that our enhanced credit rating reflects our efforts to further bolster our financial robustness, which is in alignment with our designation as a SIFI,” Kyhl concluded.

The rating change comes after Saxo Bank published its financial report for 2023 a month ago. The report showed an increase in the number of investors to 1.15 million and an operating income of DKK 4.48 billion, which modestly rose from DKK 4.45 billion reported the previous year.

How S&P Ratings Work?

S&P ratings provide a relative ranking of overall creditworthiness. They assess the ability and willingness of debt issuers, such as corporations or governments, to meet their financial commitments in full and on time.

Ratings may be changed, suspended or withdrawn at any time as the issuer's financial situation evolves. S&P publishes annual default and transition studies showing the performance of their ratings over time.

  • S&P uses letter scales to provide a common, transparent language for comparing creditworthiness:
  • Long-term credit ratings range from AAA (highest) to D (default)
  • Ratings from AA to CCC may have + or - signs to show relative standing
  • Short-term ratings range from A-1 (highest) to D
Source: Wolfstreet.com
Source: Wolfstreet.com

There are also special-purpose ratings for things like funds, using different symbols.

Saxo’s New COO and Lower FX Demand

In late March, Saxo announced the appointment of Tara Tyan as its new Chief Operating Officer (COO) for the MENA region. Tyan, who has been with the company for approximately six years, was promoted internally to this key leadership position.

With a wealth of experience in the forex and CFDs industry, Tyan brings valuable expertise to her new COO role. Before joining Saxo Bank, she held various positions at prominent brokers. In June 2013, Tyan began her career in the industry as a Regional Marketing Manager at Easy Forex, where she spent a year honing her skills. She later served as the Global Events Manager at FXPro for ten months and as a Senior Marketing Manager at Equiti for six months.

Tyan's appointment comes at a time when Saxo Bank is experiencing fluctuations in its monthly forex trading volumes. According to a recent report by Finance Magnates, the bank's forex trading volume on its platform decreased significantly in February, dropping to $92.4 billion from $106.7 billion in the previous month. This represents a month-over-month decline of 15.4 percent.

Notably, February marked the first time in two years that Saxo Bank's overall monthly forex volume fell below the $100 billion threshold. The last time the company recorded a lower monthly forex volume was in December 2021, when it posted $95.7 billion.

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