US regional lenders fall as S&P downgrades on growing liquidity worries

UMB Financial

22/08/2023 15:32

(Updates)
    ** Shares of mid-sized U.S. lenders down in morning trade
after S&P cuts credit ratings and outlooks of multiple banks;
KBW Regional Banking Index  .KRX  last down ~0.7%  
    ** 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
prevailing higher interest rates 
    ** KEY falls ~2.2%; UMBF and CMA drop ~1.2% and ~1.9%,
respectively 
    ** The downgrade comes on the heels of banking sector's
biggest crisis since 2008 earlier this year, as three mid-sized
lenders collapsed due to panicked customers pulling deposits at
a frenetic pace 
    ** KBW Regional Banking Index down ~19% YTD

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