“Moody’s cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon (BK.N), US Bancorp (USB.N), State Street (STT.N) and Truist Financial (TFC.N) on review for potential downgrades…
Moody’s said elevated CRE exposures are a key risk due to high interest rates, declines in office demand as a result of remote work, and a reduction in the availability of CRE credit…
The agency also changed its outlook to negative for eleven major lenders, including Capital One (COF.N), Citizens Financial (CFG.N) and Fifth Third Bancorp (FITB.O)…
Moody’s cautioned that banks with sizable unrealized losses that are not reflected in their regulatory capital ratios are vulnerable to a loss of confidence in the current high-rate environment.”
Analyst Comment: The banking crisis is far from over. Banks are sitting on huge unrealized losses in treasuries. Many lost a lot of cash from deposit flight during the banking crisis earlier this year. Commercial real estate (CRE) is getting pummeled while residential begins to turn negative. Consumer debt is climbing amid record high interest rates. Banks are in store for a reckoning and then a massive bailout.