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Peter Davis

An writer at FOMOdrive

  • Aug 28, 2023
  • 2 min read

Moody's downgrades 10 US banks

The credit ratings of 10 US banks were downgraded by Moody's rating agency.

Six major US banks were warned by the agency that their ratings could be cut.

On Tuesday, US stock indices experienced a decline due to Moody's downgrading of US banks.

Moody's rating agency lowered the credit ratings of 10 US banks, including M&T Bank, Pinnacle Financial, BOK Financial, Webster Financial, Fulton Financial and more.

Eleven small and medium-sized banks, such as Capital One, Citizens Financial, Fifth Third Bancorp, Simmons First National, Regions Financial, Ally Financial and others, had their rating forecasts revised downward by the agency.

Moody's has put six major US banks, including Bank of New York Mellon, U.S. Bancorp, State Street, Truist Financial, Cullen/Frost Bankers and Northern Trust, under review with the potential of downgrading their ratings.

After the collapse of Silicon Valley Bank and other banks in March of this year, the US banking industry is still dealing with interest rates and risks that could have detrimental effects on liquidity and capital, according to the agency.

Moody's has reported that the second-quarter results of many banks have revealed a growing strain on their profitability, which will weaken their capacity to produce domestic capital. This is due to the fact that a mild recession is likely to occur and asset quality will deteriorate.

The dangers are escalating, particularly for small and medium-sized banks that possess a large amount of commercial real estate loans.

CFRA Research stated that Moody's warning against a few banks, combined with Fitch's downgrade of US government debt last week, provides investors with extra cause for being wary.

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