Fitch Places Nine US Banks on Rating Watch Negative
Fitch Ratings has placed the ratings of the following nine U.S. banking companies and their bank subsidiaries on Rating Watch Negative:
BB&T Corp. (NYSE: BBT)
Discover Financial Services (NYSE: DFS)
Fifth Third Bancorp (NASDAQ: FITB)
KeyCorp (NYSE: KEY)
M&T Bank Corp (NYSE: MTB)
Popular, Inc. (NASDAQ: BPOP)
Regions Financial Corp. (NYSE: RF)
SunTrust Banks Inc. (NYSE: STI)
Wells Fargo & Co. (NYSE: WFC)
The Rating Watch extends to all ratings of the companies listed above and their subsidiaries with the exception of the support ratings and support floors for all entities as well as the short term ratings of Wells Fargo & Co. and BB&T Corp.
A full list of rating actions is available in a separate report.
Today’s actions reflect Fitch’s view that these institutions show an incrementally higher level of vulnerability to the credit deterioration which Fitch expects to continue across virtually all loan categories.
This is anticipated to place additional stress on earnings, as provision requirements are likely to remain elevated over the intermediate term. With that said, Fitch expects that the majority of the downgrades will be limited to one notch, although certain hybrid capital instruments could see additional notching.
These actions reflect the completion of the initial phase of Fitch’s most recent US bank review announced on May 7. Fitch’s review was inclusive of, but not limited to, the 19 banks included in the government stress tests. Rating actions on the other banks not mentioned above are not anticipated specifically as a result of this phase of Fitch’s review, though a number of them remain on Rating Watch Negative or their ratings have previously been assigned a Negative Outlook. These institutions are subject to the same risks, and in the current rapidly changing environment, the outlook period may be considerably shorter than the typical 12 to 24 month time frame.
Fitch anticipates completing its review of the above mentioned institutions in the next month, with the potential for rating actions sooner for those issuers that are viewed as under greater stress.
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