Moody’s downgrades 10 banks, warns of possible cuts to others

Moody’s cut credit ratings of 10 U.S. banks and placed Bank of New York Mellon (BK), US Bancorp (USB), State Street (STT) and Truist Financial (TFC) on review for potential downgrades. “Many banks’ second-quarter results showed growing profitability pressures that will reduce their ability to generate internal capital,” Moody’s said in a note. “This comes as a mild U.S. recession is on the horizon for early 2024 and asset quality looks set to decline, with particular risks in some banks’ commercial real estate portfolios.” The agency also changed its outlook to negative for eleven major lenders, including Capital One (COF), Citizens Financial (CFG) and Fifth Third Bancorp (FITB). The downgraded banks by include M&T Bank (MTB), Pinnacle Financial Partners (PNFP), Prosperity Bank and BOK Financial Corp (BOKF).