The american banking registered widespread losses on Tuesday after Moody’s decision to lower the rating of ten regional entities and put the rating of other more powerful firms under review.
An hour after the opening, the financial sector as a whole was left almost 2% on the New York Stock Exchange, but the falls of many banks were somewhat more pronounced.
Among the ten small and medium-sized entities affected by the downgrade announced by Moody’s, most lost between 3% and 4%.
For example, M&T Bank fell 3.82%, Pinnacle Finance 3.60%, commerce 3.17%, Old National Bancorp 3.46%, Webster Finance 3.14% and Fulton Finance 4.92%.
The agency reduced the credit rating of all of them by one notch late on Monday, once again focusing on the US regional bank after the problems that this year led to the collapse of several entities, with Silicon Valley Bank as the best known.
Moody’s also put six larger banks under review for a possible downgrade and these entities also suffered today on the stock market, with falls of 2.65% for Bank of New York Melon, 4.15% for US Bancorp , 3.87% for State Street or 3.90% for Truist Financial.
The big banks were not immune either, with setbacks for the largest entities in the country: JPMorgan Chase (-2.37%), Citigroup (-3.39%), Bank of America (-3.59%) and Wells Fargo (- 2.80%).
US: Moody’s downgrades 10 banks
Moody’s downgraded some small and medium-sized US banks with a warning to downgrade some of the country’s largest lenders.
According to the rating agency, the credit strength of the US banking sector will likely be tested by financing risks and weaker profitability.
Institutions receiving a downgrade from Moody’s include Bank of New York Mellon, US Bancorp, State Street, Truist Financial, Capital One, Citizens Financial, Fifth Third Bancorp, M&T Bank, Pinnacle Financial Partners, Prosperity Bank and BOK Financial Corp.
Through a note, the agency indicated that in the results of the second quarter of 2023 various banks showed greater profitability pressures, which will reduce their ability to generate internal capital.
Source: Larepublica
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