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.
(Reuters)