S&P Downgrades Multiple U.S. Banks on Growing Liquidity Worries
This followed Moody's cutting credit ratings and outlook
S&P Global followed Moody's in cutting its credit ratings and outlook on multiple U.S. regional banks on Monday, saying higher funding costs and troubles in the commercial real estate sector will likely test the credit strength of lenders.
A relentless rate-hike campaign by the U.S. Federal Reserve has raised deposit costs at banks, which have been forced to pay out higher interest to keep depositors from fleeing to other high-yielding alternatives.
S&P cut its ratings on Associated Banc-Corp (ASB.N) and Valley National Bancorp (VLY.O) on funding risks and higher reliance on brokered deposits, while UMB Financial Corp (UMBF.O), Comerica Bank (CMA.N) and KeyCorp (KEY.N) were downgraded on large deposit outflows and prevailing higher interest rates.
Please select this link to read the complete article from Reuters.