Credit agency says Scottish economy capable of gaining recognition even if it fails to retain the pound

An independent Scotland would be a wealthy and financially viable country like New Zealand, but could suffer initial growing pains, according to credit ratings agency Standard & Poor's.

In a boost to Alex Salmond's push for a split with the UK, S&P said the Scottish economy was capable of gaining recognition from the international investment community even if it fails to retain the pound and has to issue its own currency.

It added that a decision by Scottish banks and fund managers to quit Edinburgh, while painful initially in terms of jobs and tax receipts, could benefit a newly independent Scotland by reducing its exposure to a volatile industry that has suffered badly since the 2008 banking crash.

The report by S&P on an independent Scotland's creditworthiness said that growth could be slow in the early years as some financial businesses relocate to London and investors push up borrowing rates on Holyrood's debts.

"Nevertheless, with a GDP (including North Sea oil output) only slightly below that of New Zealand, a developed economy and developed financial system, there is no fundamental reason why Scotland could not successfully float a currency."

S&P dismissed concerns that Scotland would be overdependent on North Sea oil, which it said accounted for 16% of GDP, well below the 25% mark it sets for sectors to rank as dominant.

But the large-scale lending by Scottish financial institutions to businesses overseas posed a huge risk for a small economy.

"Our initial observation is that the Scottish financial sector is unusually large, with total assets estimated at 12.5 times GDP. We would therefore likely view the financial sector as a significant contingent risk to the state. At the same time, a large part of this activity could be re-domiciled to the UK," it said.

The report is likely to act as a counter-balance to the decision by fund manager Standard Life to serve notice that it could move some of its operations out of Scotland if the country votes for independence.

The pensions and savings company – which has been based in Scotland for 189 years – has said it will take whatever action it considers necessary to give continuity to its customers.

The company is one of Edinburgh's largest employers and supports a huge range of service industry businesses, including a large legal and accounting sector and the city's many private schools.

S&P said that while the economy would need to adjust to independence, and the closure or relocation of businesses south of the border would hit employment, the impact could be offset by the government's newly acquired flexibility to attract businesses to Scotland.