VLY - S&P Global Downgrade For 5 US Regional Over Commercial Real Estate Concerns | Benzinga
S&P Global has revised the prospects of five regional banks in the United States from stable to negative. This downgrade is attributed to the potential risks associated with commercial real estate (CRE).
What Happened: The outlooks of First Commonwealth Financial (NASDAQ:FCF), M&T Bank (NYSE:MTB), Synovus Financial (NYSE:SNV), Trustmark (NASDAQ:TRMK), and Valley National Bancorp (NASDAQ:VLY) were downgraded by S&P Global, according to a Reuters report. Their heightened exposure to CRE loans justified this move.
The downgrade has sparked concerns amongst investors regarding the banking sector’s stability. “The negative outlook revisions reflect the possibility that stress in CRE markets may hurt the asset quality and performance of the five banks,” stated S&P Global.
See Also: These Four Banks Could Be In Danger If Commercial Real Estate Continues To Falter
This decision follows New York Community Bancorp’s (NYSE:NYCB) unexpected quarterly loss earlier this year, which resulted from provisions on bad CRE loans. The news triggered a sell-off in US regional ...