Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Al-Quds Governorate: Today, the spatial division of Al-Aqsa Mosque began in a public and dangerous manner, and we warn of a religious war in the region
The Ministry of Health in Gaza: This brings the total number of victims of famine and malnutrition to 175, including 93 children
The Ministry of Health in Gaza: Gaza's hospitals recorded six deaths due to starvation and malnutrition in the past 24 hours, all of them adults
Informed sources to Al Mayadeen: A new chapter in relations between Iran and the International Atomic Energy Agency will begin within the framework of the new law passed by Parliament
Informed sources to Al Mayadeen: The talks will focus on the political aspect, and the agency's delegation will not be accompanied by any inspector
Informed sources to Al Mayadeen: An IAEA delegation will visit Tehran next week to discuss mechanisms for implementing the parliament's law suspending cooperation with the agency
Palestinian media: Herds of Israeli settlers storm the al-Aqsa Mosque and perform Talmudic rituals in it
Al Mayadeen's correspondent in Gaza: 15 martyrs were transferred to hospitals in the Gaza Strip in the past few hours as the Israeli occupation continues its aggression on the camps of the displaced
Al Mayadeen's correspondent in Gaza: 38 were killed since dawn on Saturday, as the Israeli occupation army targeted aid seekers at distribution sites
Palestinian Red Crescent: One martyr, several injuries among our teams after the occupation bombed the association's headquarters in al-Amal neighborhood, west of Khan Younis.

S&P downgrades US banks credit ratings, shares drop

  • By Al Mayadeen English
  • Source: News Websites
  • 23 Aug 2023 00:14
3 Min Read

S&P downgrades banks' ratings citing financing concerns, a greater reliance on brokered deposits, deposit withdrawals, and increased interest rates as reasons.

  • x
  • Shares of US banks drop after S&P downgrades some ratings
    Visitors to the financial district walk past the New York Stock Exchange, Friday, Sept. 23, 2022, in New York. (AP)

United States bank shares dipped Tuesday after S&P Global joined Moody's in downgrading credit ratings on certain regional lenders with significant commercial real estate (CRE) exposure.

The credit rating company's move will make borrowing more costly for a banking sector aiming to recover from a crisis earlier this year when three regional banks collapsed.

Read more: Credit Suisse takes $54bln loan from Swiss central bank after plunge

According to David Wagner, a portfolio manager at Aptus Capital Advisors, "Some of the structural aspects for banks, regarding their balance sheet, remain risks to banks, as the Fed continues to try to anchor inflation with higher rates for longer."

S&P downgraded Associated Banc-Corp (ASB.N) and Valley National Bancorp (VLY.O) on Monday due to financing concerns and a greater reliance on brokered deposits, while it also downgraded UMB Financial Corp (UMBF.O) and Comerica Bank (CMA.N), citing deposit withdrawals and increased interest rates as reasons for the downgrades. KeyCorp's (KEY.N) ratings were also downgraded by the rating agency due to limited profitability.

The rating seemed to hurt the equities of big banks like JPMorgan Chase (JPM.N) and Bank of America (BAC.N) who both saw their shares fall about 2%.

Citigroup (C.N), Wells Fargo (WFC.N), Goldman Sachs (GS.N), and Morgan Stanley (MS.N) all fell around 1%.

Related News

US Treasury's Adeyemo: Recession looming if US defaults on debt

Warren Buffett says bank CEOs and directors should 'suffer'

Shares of KeyCorp, Comerica, and Associated Banc-Corp fell more than 3%, while Valley National and UMB Financial fell 2% to 4%.

S&P also downgraded S&T Bank and River City Bank to "negative" from "stable", citing increased CRE risk.

Insuring banks in the US has also become more costly, as Goldman Sachs' five-year credit default swaps jumped to 78 basis points on Tuesday, up from 77 bps on Monday, close to the highest level in a month, according to S&P Global Market Intelligence data.

S&P's decision comes only weeks after Moody's downgraded 10 US banks and warned of impending downgrades for many significant institutions.

Interest rate rises by the Federal Reserve have increased bank costs since banks must now pay more interest on deposits to deter consumers from finding higher-yielding alternatives.

According to Brian Mulberry, client portfolio manager at Zacks Investment Management, the downgrades "are mainly focused on the liquidity concerns now raised by multiple agencies where banks have a lot of loan portfolios that are only drawing 2.5-4.5% in interest income while now needing to pay depositors 4.5-5.5% in savings and money market accounts."

Despite the pressures shown by the downgrades, there is no imminent systemic danger to the banking industry, he noted.

Last week, an analyst at Fitch, the third and final major rating agency, warned CNBC that numerous US banks, including JPMorgan Chase (JPM.N), might face downgrades if the sector's "operating environment" worsened further.

  • United States
  • JPMorgan
  • S&P Global Ratings
  • US Banks
  • Moody's

Most Read

A rescued crew member from the ETERNITY C vessel in a video released by the Yemeni Armed Forces on July 28, 2025 (Yemeni Military Media)

Yemen Navy reveals fate of targeted Eternity C ship crew

  • Politics
  • 28 Jul 2025
An Israeli tank explodes following an ambush by al-Qassam Brigades in Gaza, Occupied Palestine, undated (Al-Qassam Military Media)

Al-Qassam strikes Israeli vehicles in Gaza, inflicts casualties

  • Politics
  • 30 Jul 2025
UAE lodges complaint against Israeli ambassador over 'misbehavior'

UAE lodges complaint against Israeli ambassador over 'misbehavior'

  • Politics
  • 1 Aug 2025
An explosion seen during an Iranian missile attack on Tel Aviv, Occupied Palestine, June 13, 2025 (AP)

If Iran is attacked again, geography of response may change: IRGC spox

  • Politics
  • 30 Jul 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
Starved, shot, bombed, 'Israel' finds no fault
Politics

'Israel' closes 88% of war crimes cases without charges: Watchdog

Alex Karp, CEO of the software firm Palantir Technologies, arrives as then Senate Majority Leader Chuck Schumer, convenes a closed-door gathering of leading tech CEOs, Wednesday, Sept. 13, 2023 (AP)
Technology

Notorious Palantir lands record $10bln contract with the US Army

‘March for humanity’: Protesters brave rain for Gaza on Sydney bridge
Politics

‘March for humanity’: Protesters brave rain for Gaza on Sydney bridge

A Syrian Democratic Forces (SDF) fighter stands in guard during a gathering to celebrate Nowruz, Kurdish New Year, in Qamishli, northeastern Syria, Friday March 21, 2025 (AP)
Politics

SDF asserts 'right to retaliate' against strikes near Deir Hafer

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS