S&P downgrades multiple US banks citing 'tough' operating conditions By Reuters

(Reuters) - S&P Global (NYSE:) on Aihua Forex official website downloadMonday cut credit ratings and revised its outlook for multiple U.S. banks, following a similar move by Moody's (NYSE:), warning that funding risks and weaker profitability will likely test the sector's credit strength.

S&P downgraded the ratings of (NYSE:) and (NASDAQ:) on funding risks and a higher reliance on brokered deposits.

It also downgraded UMB Financial (NASDAQ:) Corp, Comerica (NYSE:) Bank and Keycorp, citing large deposit outflows and prevailing higher interest rates.

A sharp rise in interest rates is weighing on many U.S. banks' funding and liquidity, S&P said in a summarized note, adding that deposits held by Federal Deposit Insurance Corp (FDIC)-insured banks will continue to decline as long as the Federal Reserve is "quantitatively tightening."

The rating agency also downgraded the outlook of S&T Bank and River City Bank to negative from stable on high commercial real estate (CRE) exposure among other factors.

Moody's had earlier this month cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon (NYSE:) BK.N, US Bancorp (NYSE:), (NYSE:) and Truist Financial (NYSE:) on review for potential downgrades.

The collapse of Silicon Valley Bank and (OTC:) earlier this year sparked a crisis of confidence in the U.S. banking sector, leading to a run on deposits at a host of regional banks, despite authorities launching emergency measures to shore up confidence.

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