US bank stocks fall as S&P downgrades multiple regional lenders

UMB Financial

22/08/2023 16:13

(Updates)
    ** Shares of U.S. lenders down in morning trading after S&P
cuts credit ratings and outlooks of multiple regional banks; KBW
Regional Banking Index  .KRX  last down ~1.6% and S&P 500 Banks
Index  .SPXBK  falls ~1.5%  
    ** Ratings agency says higher funding costs and troubles in
commercial real estate sector will likely test the credit
strength of lenders
    ** 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 downgrades KeyCorp  KEY.N , UMB Financial  UMBF.O 
and Comerica  CMA.N , citing large deposit outflows and higher
interest rates 
    ** KEY falls ~3.4%; UMBF and CMA drop ~1.7% and ~3.6%,
respectively 
    ** JPMorgan Chase  JPM.N , Wells Fargo  WFC.N , Goldman
Sachs  GS.N , Morgan Stanley  MS.N , Citigroup  C.N , and Bank
of America  BAC.N  drop between ~0.6% and ~1.4%
    ** The downgrade comes on the heels of banking sector's
biggest crisis since 2008 earlier this year, as three mid-sized
lenders collapsed after the panicked customers rushed to
withdraw their deposits  
    ** KBW Regional Banking Index down ~19.5% YTD

 (Reporting by Manya Saini in Bengaluru)
 ((Manya.Saini@thomsonreuters.com))