S&P Global Ratings has revised down the ratings of five regional banks in the United States.
A company engaged in analytical research of the financial market has lowered the ratings of five regional-level lenders by one notch. The banks whose condition assessment has deteriorated are KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial Corp., and Associated Banc-Corp.
The firm stated that the decision to change the rating positions of financial institutions was made due to the fact that there is currently a tough credit environment in the United States. The relevant information is contained in an analytical note published by the company.
Also, S&P Global Ratings reported a high probability of deterioration of the rating of several other creditors included in the structure of the banking sector of the United States.
The company changed its assessment of financial institutions two weeks after Moody’s worsened the rating positions of several major American banks, including Bank of New York Mellon, State Street, and Northern Trust. This news came as a surprise to the markets. Experts of the rating agency explained the decision to change the assessment of the creditors’ condition to the tense situation in the banking sector.
American financial institutions found themselves in a difficult situation amid problems in the industry that began after the collapse of the Silicon Valley Bank. Against the background of this unequivocally negative event, regional lenders were forced to pay high-interest rates on deposits in order to prevent the outflow of customer funds. These actions are a negative factor affecting the profitability of financial institutions. Some regional banks are still taking measures to counteract the process of deposit outflow.
S&P Global Ratings reported a decrease in the average volume of Comerica deposits by $ 14 billion from the second quarter of last year to 2023. The company said that this indicator was one of the reasons for the downgrade of the bank’s rating position. This lender also has a relatively high proportion of commercial and uninsured deposits. Similar problems are typical for the other four regional financial institutions, whose rating has been revised downwards.
At the same time, 90% of S&P Global Ratings’ bank ratings have stable forecasts.
