By Lananh Nguyen and Juby Babu
(Reuters) - Moody’s cut credit ratings of several small to mid-sized U.S. banks on Monday and said it may downgrade some of the nation’s biggest lenders, warning that the sector’s credit strength will likely be tested by funding risks and weaker profitability.
Moody’s cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial on review for potential downgrades.
“Many banks’ second-quarter results showed growing profitability pressures that will reduce their ability to generate internal capital,” Moody’s said in a note.
“This comes as a mild U.S. recession is on the horizon for early 2024 and asset quality looks set to decline, with particular risks in some banks’ commercial real estate (CRE)portfolios.”
Moody’s said elevated CRE exposures are a key risk due to high interest rates, declines in office demand as a result of remote work, and a reduction in the…
2023-08-07 22:20:59
Link from finance.yahoo.com
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