S&P downgrades multiple US banks

Business Desk :
S&P Global on Monday cut credit ratings and revised its outlook for multiple US banks, following a similar move by Moody’s, warning that funding risks and weaker profitability will likely test the sector’s credit strength.

S&P downgraded the ratings of Associated Banc-Corp and Valley National Bancorp on funding risks and a higher reliance on brokered deposits.

It also downgraded UMB Financial Corp, Comerica Bank and Keycorp, citing large deposit outflows and prevailing higher interest rates.

A sharp rise in interest rates is weighing on many US 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.”