Moody's downgrades 10 US banks, warns of possible cuts to others (updated)
08/08/2023 04:13
(Adds detail from Moody's reports.)
By Lananh Nguyen and Juby Babu
Aug 7 (Reuters) - Ratings agency Moody's downgraded the
credit ratings of several U.S. banks on Monday and warned it was
reviewing the status of some of the nation's biggest lenders.
Moody's cut the ratings of 10 U.S. banks by one notch and
placed some banking giants on review for potential downgrades.
The agency also changed its outlook to negative for several
major lenders. Overall, it changed the assessments for 27 banks
in the sector.
The downgraded banks include M&T Bank MTB.N , Pinnacle
Financial Partners PNFP.O , Prosperity Bank and BOK Financial
Corp BOKF.O .
The banks placed on review for downgrade include BNY Mellon
BK.N , US Bancorp USB.N , State Street STT.N and Truist
Financial TFC.N .
"Many banks’ Q2 results showed growing profitability
pressures that will reduce their ability to generate internal
capital," Moody's wrote in a note.
"This comes as a mild recession looms," and banks contend
with greater risks from interest rates and managing their assets
and liabilities, the ratings agency said.
The collapse of Silicon Valley Bank and Signature Bank
earlier this year sparked a crisis of confidence in the U.S.
banking sector, leading to a run on deposits at a host of
regional banks despite authorities launching emergency measures
to shore up confidence.
Moody's changed its outlook to negative from stable for
Capital One COF.N , Citizens Financial CFG.N and Fifth Third
Bancorp FITB.O , among others.
The ratings agency also affirmed the ratings of PNC
Financial Services Group PNC.N , Citizens, and Huntington
Bancshares HBAN.O alongside other banks.
(Reporting by Juby Babu in Bengaluru; Editing by Muralikumar
Anantharaman and Shri Navaratnam)
((Juby.Babu@thomsonreuters.com;))