Moody’s Investors Service has downgraded the credit ratings of 11 US regional banks, suggesting that higher interest rates and recent bank failures have led to greater instability. Among banks with downgraded ratings are Bancorp, with $682 billion in assets; Zions Bancorp, with US$ 89 billion; and Bank of Hawaii, with US$ 24 billion.
Western Alliance Bancorp, one of the banks hardest hit by the regional banking turmoil, suffered a two-step downgrade. First Republic Bank, which faced a run on deposits last month, had its preferred stock rating downgraded.
The problems with Silicon Valley Bank and Signature Bank have highlighted weaknesses in regional banks, many of which have made low-interest loans and bought bonds at low rates. Some have a high share of customers with unsecured deposits that became more volatile when the turmoil began.
The rating agency said tensions in the way banks are managing their assets and liabilities are becoming “increasingly evident” and putting pressure on profitability. Recent events “have called into question whether the allegedly high deposit stability of some banks, and their operational nature, should be reassessed,” Moody’s said in a report.
The other downgraded banks were US Bank, Associated Banc, Comerica, First Hawaiian, Intrust Financial and Washington Federal.
Source: Dow Jones Newswires.
The information is from the newspaper The State of S. Paulo.
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