S&P downgrades these US banks on funding risk, weak profitability; check details

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real estate sector as expected to put lenders' creditworthiness to the test, reported Reuters. Banks have been forced to pay out higher interest rates in order to prevent depositors from running away to other high-yielding options due to the US Federal Reserve's unrelenting campaign of rate hikes.

According to Reuters' report, S&P downgraded the ratings of Valley National Bancorp, UMB Financial Corp, and Comerica Bank on Monday due to funding risks and their increased reliance on brokered deposits. Meanwhile, KeyCorp, UMB Financial Corp, and Comerica Bank were downgraded due to significant deposit outflows and the current higher interest rate environment.

Also Read: Moody's downgrades credit ratings for 10 US banks, more cuts likely; stocks fall 1-3% S&P also lowered the outlook of S&T Bank and River City Bank to "negative" from "stable", citing higher CRE exposure, according to Reuters. Due to the agency's action, borrowing will become more expensive for the struggling banking industry, which is trying to recover from the crisis that occurred earlier this year when the failure of Silicon Valley Bank and Signature Bank caused a loss of confidence and resulted in a run on deposits at multiple regional lenders.

Borrowing costs globally have also surged, with the US Treasury yields hitting their highest in 16 years as the bond market rout entered its sixth week on Tuesday, Reuters said in its report. Also Read: Moody's affirms India's Baa3 rating, maintains ‘stable’ outlook on economy The move by S&P followed several weeks of comparable downgrades by its rival Moody's, which had downgraded ratings on ten US banks and put six—including State Street, Truist Financial, US Bancorp, and Bank of New York Mellon—under review for