US Bank Shares Drop as Moody’s Cuts Ratings, Warns on Risks

Rating company downgrades 10 lenders, citing dimmer outlook
U.S. Bancorp, BNY Mellon among six firms facing potential cuts

Michael Collins, senior portfolio manager at PGIM Fixed Income, says the tightening of capital requirements will benefit US regional bank bondholders long-term. “The big super regional banks are going to be a little more tightly regulated, and that actually is a tailwind for bond investors,” he says on “Bloomberg The Open.”Source: Bloomberg

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By Hari Govind and Steve Dickson

August 8, 2023 at 12:03 AM UTC

Updated on

August 8, 2023 at 1:52 PM UTC

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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.