Moody’s may downgrade the ratings of 6 regional banks in the USA
Moody’s has announced that at least six US regional banks are at risk of having their debt ratings downgraded.
At least six U.S. regional banks with significant exposure to commercial real estate loans are at risk of having their debt ratings downgraded, Moody’s said.
First Merchants, F.N.B., Fulton Financial, Old National Bancorp, Peapack-Gladstone Financial and WaFd are under review for downgrade by the rating provider.
Regional banks, which have a significant concentration in commercial real estate loans, face asset quality and profitability pressures as higher interest rates increase ongoing risks over the long term, Moody’s said.
In the low interest rate environment that prevailed before the start of the Fed’s rate-hiking cycle, many regional banks chose to establish and maintain meaningful concentrations in commercial real estate, a “volatile asset class,” according to Moody’s.