S&P Global followed Moody’s in cutting its credit ratings and outlook on multiple U.S. regional banks, saying higher funding costs and troubles in the commercial real estate sector will likely test the credit strength of lenders.
S&P on Monday cut its ratings on Associated Banc-Corp and Valley National Bancorp on funding risks and higher reliance on brokered deposits, while UMB Financial Corp, Comerica Bank and KeyCorp were downgraded, citing large deposit outflows and prevailing higher interest rates. S&P also lowered the outlook of S&T Bank and River City Bank to “negative” from “stable”, citing higher CRE exposure.
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