S&P Global RatingsDowngraded First Republic Bank to junk. Despite U.S. regulators pledging to help the banking sector, concerns persist that First Republic clients will withdraw their deposits.
S&P downgraded First Republic’s credit rating to ‘BB+’ from ‘A-‘, according to a statement on Wednesday. We maintain a ‘Watch Negative’ rating outlook. Despite the recent increase in borrowing capacity, First Republic is at risk of further deposit outflows, which S&P said might lead to further rating cuts.
“First Republic’s operating environment is expected to take a hit following large share price volatility and high media interest in deposit volatility,” S&P analysts Nicholas Wetzel and Ryan Pressman wrote in a note. pointed out. “The market’s perception of First Republic’s creditworthiness is deteriorating, and the bank’s business stability is weakening,” he added.
First Republic fell 26% at one point in the US stock market on the 15th. Other regional bank stocks have also been soft.
A spokeswoman for First Republic declined to comment.
Source: Bloomberg
Original title:First Republic Bank Cut to Junk by S&P on Deposit Outflow Risk(excerpt)
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