Posted on 08/08/2023 7:25:48 AM PDT by Kaiser8408a
Rating company downgrades 10 lenders, citing dimmer outlook U.S. Bancorp, BNY Mellon among six firms facing potential cuts Not surprising given that Bidenomics is nothing more than giving big bucks to big corporations, including banks. Regional/small banks? Not so much.
US bank stocks declined after Moody’s Investors Service lowered its ratings for 10 small and midsize lenders and said it may downgrade major firms including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.
Higher funding costs, potential regulatory capital weaknesses and rising risks tied to commercial real estate are among strains prompting the review, Moody’s said late Monday
Shares declined for firms that had their ratings cut, including M&T Bank Corp., down 3.2%, and Webster Financial Corp., which lost 1.3%. Moody’s also adopted a “negative” outlook for 11 lenders, including PNC Financial Services Group, Capital One Financial Corp. and Citizens Financial Group Inc. Among those, PNC was down 2.2% and Capital One lost 2.4%.
“Rising funding costs and declining income metrics will erode profitability, the first buffer against losses,” Moody’s wrote in a separate note explaining the moves. “Asset risk is rising, in particular for small and midsize banks with large CRE exposures.”
Some banks have curbed loan growth, which preserves capital but also slows the shift in their loan mix toward higher-yielding assets, Moody’s said.
Banks that depend on more concentrated or higher levels of uninsured deposits are more exposed to these pressures, especially banks with high levels of fixed-rate securities and loans.
Deposits are declining as The Fed hikes rates.
So, Bidenomics reminds me of the film “Rollerball” where big corporations run the government and run a game akin to Rome’s gladiator fights.
(Excerpt) Read more at confoundedinterest.net ...
Mellon....wow. One of the oldest and most financially conservative banks.
I’m guessing their exposure is low yield bonds and low rate financing trapped on their books.
The inflation reduction act (quote/unquote) benefits Big Corp more than anyone else.
Just went to Mellon’s web site - nothing but woke jumps out:
You’d think a financial institution seeing hard times would get serious, but everything is run by woke morons now, so “gender equality” will fix their toxic asset problems... I guess.
This has been the case for a year. As interest rates rose, the banks bet we were too lazy to move our money out of the paltry 0.01% savings accounts. They lost the bet.
At the Mellon website, this is the screaming banner:
INVESTING IN AND FOR WOMEN
Mellon is solving the “gender inequality” issue, which doesn’t exist, but not solving their financial crisis, which does exist.
That was a fantastic movie.
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