{"id":2008932,"date":"2023-08-23T04:38:02","date_gmt":"2023-08-23T08:38:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sp-downgrades-five-us-banks-citing-tough-operating-conditions\/"},"modified":"2023-08-23T04:42:57","modified_gmt":"2023-08-23T08:42:57","slug":"sp-downgrades-five-us-banks-citing-tough-operating-conditions","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sp-downgrades-five-us-banks-citing-tough-operating-conditions\/","title":{"rendered":"S&#038;P downgrades 5 US banks due to challenging conditions."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsp-downgrades-five-us-banks-citing-tough-operating-conditions%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2008932&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>S&#038;P Global followed Moody&#8217;s lead by downgrading the ratings\u200c of five U.S.\u2063 regional banks\u2062 by one \u2063grade and gave a negative outlook for others.<\/p>\n<p>The credit \u200dratings agency \u200breleased an Aug. <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sp-downgrades-five-us-banks-citing-tough-operating-conditions\/\" title=\"S&#038;P downgrades 5 US banks due to challenging conditions.\">2 research note citing recent \u201ctough\u201d \u2062lending conditions<\/a>, which led it to cut the ratings\u200b of KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial \u2063Corp. and Associated Banc-Corp.<\/p>\n<p>It blamed \u200bhigher funding \u200dcosts and sluggish <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/manhattan-sees-record-high-office-vacancy-rate-as-businesses-flee\/\" title=\"Manhattan Sees Record High Office Vacancy Rate As Businesses Flee\">commercial real estate<\/a> sector,\u2064 which have put \u2062stress on lenders.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\">\n<div class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/article\/fitch-warns-it-might-downgrade-dozens-of-us-banks-after-slashing-americas-credit-rating-5466764\">Fitch \u2064Warns It Might Downgrade Dozens of US Banks\u2064 After Slashing \u200dAmerica&#8217;s Credit Rating<\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">8\/15\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/article\/fitch-warns-it-might-downgrade-dozens-of-us-banks-after-slashing-americas-credit-rating-5466764\"><\/a>\n        <\/div>\n<\/p><\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/us\/major-credit-rating-agency-drops-esg-scores-amid-backlash-to-corporate-wokeism-5454252\">Major Credit \u2064Rating \u200bAgency Drops ESG Scores Amid Backlash to Corporate Wokeism<\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">8\/9\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/us\/major-credit-rating-agency-drops-esg-scores-amid-backlash-to-corporate-wokeism-5454252\"><\/a>\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>The move by Standard &#038; Poor\u2019s comes two weeks\u2062 after Moody\u2019s cut the credit ratings of 10 regional U.S. lenders \u200cand put six large banks on review for potential \u2063downgrades, including Bank of\u2062 New York \u2064Mellon, US\u200d Bancorp, State Street, Trust \u2064Financial, and Northern Trust.<\/p>\n<p>The action earlier this \u200bmonth caused shockwaves across global financial markets and reignited\u2064 concerns \u200dof a looming U.S. recession.<\/p>\n<p>Moody&#8217;s warned of \u201congoing strain\u201d in the U.S. banking sector, such as increased pressures on funding, and \u200bthat the amount of capital lenders are required to hold \u200dduring a crisis may not be \u2063enough.<\/p>\n<p>\u201cHigher interest rates continue to reduce \u2062the value\u2064 of U.S. \u2064banks\u2019 fixed-rate securities \u2062and loans, and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bond-market-swinging-between-rallies-routs\/\" title=\"Bond Market Swinging Between Rallies, Routs\">interest-rate risk<\/a> \u200cis not captured well in U.S. bank regulation and \u200bthus can create liquidity risks,\u201d Moody\u2019s wrote in its \u200creport.<\/p>\n<h2>US \u200cFinancial Sector Under Major\u2062 Stress<\/h2>\n<p>The 2023 U.S. \u2063bank crisis and the Federal \u2063Reserve&#8217;s \u200bmove to aggressively \u200dhike borrowing rates has forced many regional banks to \u200braise deposit costs.<\/p>\n<p>The\u2062 collapse of both Silicon Valley\u2062 Bank and \u200cSignature Bank\u2064 sparked a loss of confidence in the industry and led \u200bto a \u200brun \u2063on deposits at several regional lenders.<\/p>\n<p>The spike in deposit\u200b costs has forced \u2063smaller lenders to \u2064offer\u200d depositors\u2063 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/janet-yellen-as-congress-for-billions-to-help-other-countries-debt-relief-climate-change-initiatives\/\" title=\"Janet Yellen As Congress For Billions To Help Other Countries\u2019 \u2018Debt Relief,\u2019 \u2018Climate Change\u2019 Initiatives\">higher interest rates<\/a> \u2063to keep them from moving to higher yielding alternatives, \u2064but that \u200bhas directly cut into their profitability.<\/p>\n<p>Even after offering\u200d generous interest rates, many regional\u2063 banks are still \u2062struggling to prevent deposit outflows.<\/p>\n<p>S&#038;P slashed the ratings for\u200b Associated Banc-Corp and Valley National Bancorp due to funding risks and increasing\u200b reliance\u2063 on brokered deposits, while citing major deposit outflows and the effect of higher interest rates for downgrading UMB\u2064 Financial Corp, Comerica Bank and KeyCorp.<\/p>\n<p>The agency\u200d cited\u200d Comerica\u2019s $14 billion decline\u200b in average deposits this year \u200cfrom the second quarter of\u200b 2022 \u2064as one of the key reasons for its downgrade. \u2062S&#038;P \u2062also highlighted \u2064its \u201crelatively high proportion of commercial\u200d and uninsured\u200d deposits\u201d\u2064 in its decision.<\/p>\n<p>The other four banks are facing similar issues, according\u200b to the report.<\/p>\n<p>S&#038;P \u200dalso lowered the \u2063outlook of S&#038;T \u200cBank and River City Bank to &#8220;negative&#8221; from &#8220;stable&#8221; \u2063due to their \u200chigher exposure to commercial real estate.<\/p>\n<p>The commercial real estate\u200d sector has collapsed, as remote \u200cwork became commonplace since \u2063the\u2062 pandemic.<\/p>\n<p>This has put severe pressure on\u2063 small to mid-sized banks,\u200b which have disproportionately financed many commercial real estate deals, leading them to potentially suffer losses as a result.<\/p>\n<p>Moody&#8217;s noted that many &#8220;regional banks \u2064have\u200c comparatively low regulatory capital versus the largest U.S. banks and global peers.&#8221;<\/p>\n<p>\u201cToday\u2019s downgrades provide further evidence \u2064that the banking crisis is far from over,\u201d Michael Wilkerson, a strategic adviser and investor, told The Epoch Times.<\/p>\n<h2>Most\u2064 Lende<\/h2>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>S&amp;P Global downgraded ratings of five U.S. regional banks, following Moody&#8217;s lead. Tough lending conditions prompted the credit ratings agency to lower ratings of KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial Corp. A negative outlook was also given for other banks, as stated in their Aug. 2 research note.<\/p>\n","protected":false},"author":327,"featured_media":2008933,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2008932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2008932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/327"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2008932"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2008932\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2008933"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2008932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2008932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2008932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}