S&P downgraded the ratings of Associated Banc-Corp (ASB.N) and Valley National Bancorp (VLY.O) on funding risks and a higher reliance on brokered deposits.
It also downgraded UMB Financial Corp (UMBF.O), Comerica Bank (CMA.N) and Keycorp (KEY.N), citing large deposit outflows and prevailing higher interest rates.
A sharp rise in interest rates is weighing on many U.S. banks' funding and liquidity, S&P said in a summarized note, adding that deposits held by Federal Deposit Insurance Corp (FDIC)-insured banks will continue to decline as long as the Federal Reserve is "quantitatively tightening."
The rating agency also downgraded the outlook of S&T Bank and River City Bank to negative from stable on high commercial real estate (CRE) exposure among other factors.
Reporting by Gokul Pisharody in Bengaluru; Additional reporting by Akanksha Khushi; Editing by Varun H KOur Standards: The Thomson Reuters Trust Principles.
Persons:
Moody's, Bank of New York Mellon BK.N, Gokul, Akanksha Khushi, Varun
Organizations:
Global, National Bancorp, UMB Financial Corp, Comerica Bank, Federal Deposit Insurance Corp, Federal, T Bank, City Bank, Bank of New York Mellon, US Bancorp, Truist, Silicon Valley Bank, Signature Bank, Thomson
Locations:
New York City, U.S, Silicon, Bengaluru