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Moody’s, the ratings agency, has downgraded the credit ratings of 10 small and midsized banks. Additionally, they have placed six big lenders on notice for a future downgrade. The agency cited profitability challenges and funding risks as the reasons for the downgrades.
Key Takeaways
Moody’s has downgraded the credit ratings of 10 smaller regional and midsized banks. They have also assigned a negative outlook for six big lenders. The agency highlighted higher funding costs, profitability pressures, and slowing loan growth as common themes in banks’ second-quarter earnings. They also mentioned that the Federal Reserve’s rate hikes will lower profitability as consumers take out fewer loans. Among the bigger banks, Moody’s reasons for assigning a negative outlook varied by lender. Some, such as U.S. Bancorp and Truist Financial, have low capital buffers, while others, like State Street and BNY Mellon, have experienced large deposit outflows.
Moody’s has downgraded the credit ratings of 10 midsized banks by one notch. These banks include M&T Bank (MTB) and Webster Bank (WBS), among others.
2023-08-08 10:31:07
Post from www.investopedia.com
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