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Moody’s late on Monday put six banks on review for possible downgrade as it also said it will withdraw ratings on collapsed Signature Bank.
The downgrade warnings may put further pressure on regional banks after the collapse of SVB Financial
SIVB,
and Signature Bank
SBNY,
The warnings were on First Republic, Intrust Financial , UMB Corp
UMBF,
Zions Bancorp
ZION,
Western Alliance and Comerica
CMA,
In First Republic’s case, Moody’s blamed the bank’s high reliance on uninsured deposits, its high amount of unrealized losses, as well as a low capitalization relative to peers, though it gave credit to its “official sector borrowing capacity” and its strong franchise in private banking and private wealth management for high-net-worth individuals.
The Invesco KBW Regional Banking ETF
KBWR,
fell 7% on Monday, and First Republic
FRC,
stock dropped by 62%.
The mood music was better on Tuesday, with First Republic stock up 21% in the premarket, with Western Alliance
WAL,
shares up 13%.
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