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Written by: RJ
Credit rating agency Moody’s has cut the credit ratings of smaller to mid sized banks.
Downgraded banks of note
- M&T Bank
- Pinnacle Financial
- BOK Financial
- Webster Financial
Under review for potential downgrade
- Bank of New York Mellon
- US Bancorp
- State Street
- Truist Financial
- Cullen/Frost Bankers
- Norther Trust
Negative outlook for 11 total banks, highlights include
- Capital One
- Citizens
- Fifth Third
“U.S. banks continue to contend with interest rate and asset-liability management (ALM) risks with implications for liquidity and capital, as the wind-down of unconventional monetary policy drains systemwide deposits and higher interest rates depress the value of fixed-rate assets,”
Moody’s analysts Jill Cetina and Ana Arsov
“Meanwhile, many banks’ Q2 results showed growing profitability pressures that will reduce their ability to generate internal capital. This comes as a mild U.S. recession is on the horizon for early 2024 and asset quality looks set to decline from solid but unsustainable levels, with particular risks in some banks’ commercial real estate (CRE) portfolios.”
Thoughts
Could be related to asset management in a rising interest rates environment… or all the bonus hunters who read this site… who’s to say?
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Totally related to today’s channel video and not this post but could not post it there. …”including Delta SkyMiles, United MileagePlus, Hilton Honors, and Marriott Bonvoy — is built on the same platform.” https://it.slashdot.org/story/23/08/03/2118217/hackers-could-have-scored-unlimited-airline-miles-by-targeting-one-platform
Post added. They could have lead with Points commissioned the study… opposed to making it seem like a gotcha thing. Interesting as I never considered who ran the loyalty programs
Yes it would of been better to lead with that.
We in a lot of industries put most of our eggs in one basket (Cal-Maine with all their labels) – literally – in a increasing amount with less new companies and more mergers.
Do they even know how to asses the larger sized banks to see if they need a downgrading?
The argument is the bigger too big to fail banks are under tighter regulation. The regionals lobbied hard to not be subject to the same rules. Now it’s being discussed again if that was a good idea or not.
Considering they retro-actively on one of the regional failures (Silicon Valley Bank) soon after the failure considered it systemic risk make you wonder if they have enough person-power to check on them.
Will get an idea Thursday morning of interest rates with CPI version one numbers for July coming out then.