Fitch Affirms Ratings of 14 Banks - Analyst Blog
01 November 2012 - 4:19AM
Zacks
Fitch Ratings has affirmed its Issuer Default Ratings (IDRs) on
14 large regional banks. This follows a thorough review of the peer
group.
The banks include BB&T Corporation (BBT),
Capital One Finance Corp.(COF), Comerica
Incorporated (CMA), Fifth Third Bancorp
(FITB), Huntington Bancshares Incorporated (HBAN),
KeyCorp (KEY), M&T Bank
Corporation (MTB), PNC Financial Services Group
Inc (PNC), Regions Financial
Corp. (RF), SunTrust Banks Inc. (STI),
US Bancorp (USB), Wells Fargo &
Company (WFC), UnionBanCal Corporation and Zions
Bancorp. (ZION).
Based on ratings, the group has been divided into three distinct
categories. The first category banks have an ‘AA-‘or ‘A+ rating.
The ratings are sustained mainly by these banks’ sturdy earnings
profile, sensible risk profiles, consistent performance through the
recent financial crisis, and steady earnings growth. Although asset
quality of some of these banks deteriorated, sound capital position
and reserves absorbed all the losses stemming from it. US Bancorp,
Wells Fargo, BBT and PNC fall in this section.
The second category involves banks, which have diverse ratings
spanning from ‘A’ to ‘BBB+’. UnionBanCal, Capital One, Comerica,
Fifth-Third, KeyCorp, M&T Bank, and Huntington come under this
group. According to Fitch, these banks have solid credit profiles,
but certain bank-specific aspects keep these away from being on the
top. For instance, relatively low earnings mar some companies
having strong capital position and in some cases, low capital
position offset the strong risk-adjusted earnings.
In the last category, banks having ‘BBB+’ to ‘BBB-‘ratings are
included. Zions, SunTrust, and Regions’ belong to this group. As
per Fitch, these banks lagged peers in terms of earnings and asset
quality performance during the financial crisis, but of late have
started displaying improving trends.
Earlier in October, Fitch had reiterated the long and short-term
IDR of 12 Global Trading and Universal Bank (GTUB) peer group
(formed last October and includes 13 major securities trading and
universal banks). Moreover, excluding one bank, Fitch re-affirmed
the respective outlook for all others.
The rating affirmation will prove beneficial to the already
stressed financial sector. Further, this will reinforce investors’
confidence in the sector. Also, this might help the financial
institutions to withstand another financial crisis.
BB&T CORP (BBT): Free Stock Analysis Report
COMERICA INC (CMA): Free Stock Analysis Report
CAPITAL ONE FIN (COF): Free Stock Analysis Report
FIFTH THIRD BK (FITB): Free Stock Analysis Report
HUNTINGTON BANC (HBAN): Free Stock Analysis Report
KEYCORP NEW (KEY): Free Stock Analysis Report
M&T BANK CORP (MTB): Free Stock Analysis Report
REGIONS FINL CP (RF): Free Stock Analysis Report
SUNTRUST BKS (STI): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
ZIONS BANCORP (ZION): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Capital One Financial (NYSE:COF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Capital One Financial (NYSE:COF)
Historical Stock Chart
From Jul 2023 to Jul 2024