S&P Global downgrades a handful of regional US banks.

MADRID, Aug. 22 (-) –

The S&P Global Ratings agency has revised downward the solvency ratings of five regional banks in the United States and has worsened the rating outlook of two other entities to reflect the adverse impact on their profitability of higher financing costs as a result of the interest rate hikes.

Specifically, the agency has downgraded Associated Banc’s ratings to ‘BBB-‘ from ‘BBB’, with a stable outlook; KeyCorp, down to ‘BBB’ from ‘BBB+’, with a stable outlook; Comerica, to ‘BBB’ from ‘BBB+’, with a stable outlook; UMB Financial, to ‘BBB+’ from ‘A-‘, with a stable outlook; and Valley National Bancorp, to ‘BBB-‘ from ‘BBB’, with a stable outlook.

Likewise, S&P Global has also worsened the outlook for the ratings assigned to regional banks S&T Bank and River City Bank, which in both cases are negative from stable. For its part, the agency confirmed the solvency notes of Zions Bancorporation (BBB+), Truist Financial (A-) and Synovus Financial (BBB-).

S&P Global’s decision comes just a couple of weeks after Moody’s lowered the debt solvency rating of a dozen small and medium-sized banks in the United States, while placing it on review for a possible cut in ‘ rating’ to six other larger banks and revised the outlook for the ratings of eleven more entities.

In its analysis, Moody’s also warned of risks related to interest rates and asset liability management with implications for liquidity and capital, as the end of unconventional monetary policy drains deposits from the entire system and higher rates reduce the value of fixed-rate assets.

Thus, Moody’s considered that the increase in financing costs and the decrease in income metrics will erode the profitability of entities.

In this way, Moody’s downgraded the long-term solvency rating of a dozen small entities, including the ratings of M&T Bank, Pinnacle Financial, BOK Financial, Webster Financial, Commerce Bancshares, Old National Bancorp, Prosperity Bancshares, Amarillo National Bancorp, Fulton Financial and Associated Banc-Corp.

Likewise, the risk rating agency placed the notes of six other entities such as Bank of New York Mellon, US Bancorp, State Street, Truist Financial, Cullen/Frost Bankers and Northern Trust under surveillance for a potential rating downgrade.

For its part, the agency has downgraded the rating outlook of eleven other banks to negative, including some as prominent as Capital One, Citizens Financial, PNC Financial Services Group, Ally Financial or Fifth Third Bancorp.

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