S&P downgrades multiple US banks citing 'tough' lending environment
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S&P Global cut the credit ratings of five regional U.S. banks and lowered its outlook for several other lenders, citing concerns over the «tough» lending environment.
The agency said late Monday that it lowered the grades one notch for KeyCorp, Comerica Bank, Valley National Bancorp, UMB Financial Corp. and Associated Banc-Corp amid growing risks from weaker funding, large deposit outflows and rising interest rates.
The rating agency also downgraded its outlook of S&T Bank and River City Bank to negative from stable, pointing to the high proportion of commercial real estate exposure.
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A Comerica Bank branch in Dallas, Texas, on April 14, 2023. (Shelby Tauber/Bloomberg via / Getty Images)
The move comes just two weeks after Moody's roiled financial markets when it announced that it lowered the ratings of 10 small- and mid-sized banks by one notch and that it placed six banking giants – including U.S. Bancorp, Bank of New York Mellon and Truist Financial – on review for potential downgrades.
Among the firms that had their ratings cut by Moody's were M&T Bank, Pinnacle Financial, BOK Financial, Webster Financial, Old National Bancorp and Fulton Financial.
"U.S. banks continue to contend with interest rate and asset-liability management (ALM) risks with implications for liquidity and capital, as the wind-down of unconventional monetary policy drains systemwide deposits and higher interest rates depress the value of fixed-rate assets," Moody’s analysts said of the decision.
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Regional banks
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