Ratings agency S&P Global on Tuesday downgraded its outlooks for five regional U.S. banks to due to their commercial real estate exposures, in a move likely to reignite investor concerns about the health of the sector.
"The negative outlook revisions reflect the possibility that stress in CRE markets may hurt the asset quality and performance of the five banks, which have some of the highest exposures to CRE loans among banks we rate," S&P said. Investor concerns over regional banks' CRE exposure intensified this year after New York Community Bancorp , opens new tab flagged a surprise quarterly loss citing provisions on soured CRE loans, which triggered a sell-off in U.S. regional banking shares. The bank has sold assets to shore up its balance sheet.
Tuesday's downgrades come a year after the collapse of Silicon Valley Bank and Signature Bank, which heightened investor sensitivity about the health of U.S. regional banks.
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