By
Temitope Olatunji
April 16th, 2024
Moody’s also put the ratings of six other banks in the US under review.
Ratings agency Moody’s has downgraded the debt ratings of recently collapsed Signature Bank (NASDAQ: SBNY) to junk amid the happenings in the US banking sector. Signature Bank began to lose its shares following the demise of Silicon Valley Bank last week. As investors’ worries peaked, the New York Department of Financial Services (NYDFS) took over Signature Bank to protect depositors’ funds. The State regulators shut down the bank two days after Silicon Valley Bank’s crumble.
Moody’s Downgrades Signature Bank
Moody’s is downgrading the debt ratings of Signature bank into junk territory after it formerly rated its subordinate debt ‘C.’ Also, the ratings agency said it would withdraw future ratings for the financial institution. Signature Bank closed trading at a loss of 22.87% to $70. The company has been continually amassing losses in the last twelve months. Record shows that the bank’s shares have dropped almost 76% in the last one year. It has also shed 39.25% since 2023 started, losing nearly 43% in the last three months. Furthermore, the financial institution has dropped by 46.43% over the past month and reduced by 36.87% in the last five days.
Moody’s also put the ratings of six other banks in the US under review. The company is considering the US banks for a downgrade. The affected banks include First Republic Bank (NYSE: FRC), Zions Bancorporation (NASDAQ: ZION), and Western Alliance Bancorporation (NYSE: WAL). Others are Intrust Financial Corporation, UMB Financial Corp, and Comerica Inc. (NYSE: CMA).
Coinspeaker reported First Republic Bank’s major share loss on Monday, noting that the American foreign exchange company plunged more than 60%. When the market closed yesterday, the bank was down 61.83%. The current happenings in the US banking space have stirred rears among investors who have begun to question the organization’s financial ability. FBC saw its shares fall 15% as SVB experienced cash flow last week. SVB’s takeover by the Federal Deposit Insurance Corporation (FDIC) caused the company to decline by over 60%. First Republic Bank closed its last reading at a deficit of 61.83% to $31.21. The light at the tunnel is shining bright for the company as it has regained some of its losses with an increase of 18.55% in premarket trading.
With banks collapsing in the US, the POTUS Joe Biden is calling Congress and regulators to tighten bank rules. While delivering remarks on the economy on Monday, he said the administration needs to reduce the risk of a recurrence of what happened to SVB and Signature Bank. In conclusion, the president assured Americans of a safe banking system and the security of their deposits.