(MENAFN- Trend News Agency) Ratings agency Moody's on Friday downgraded the credit of First
Republic Bank, citing deterioration in the bank's financial profile
and challenges faced by the lender due to increased reliance on
funding amid deposit outflows, trend reports with reference to reuters .
The agency cut the bank's long-term issuer rating and local
currency subordinate ratings to B2 from Baa1 and long-term local
currency bank deposit rating to Baa3 from A1, among others.
The outlook on the issuer rating and long-term bank deposits of
First Republic Bank remain under review, Moody's said.
Moody's said it believes the bank's high cost of borrowings,
along with the 'high proportion of fixed rate assets at the bank,
is likely to have a large negative impact on First Republic's core
profitability in coming quarters.'
'In addition, the rating agency noted that while the news of the
banking consortium's deposits is positive in the short-run, the
longer-run path for the bank back to sustained profitability
Moody's this week lowered its outlook on the U.S. banking system
to 'negative' from 'stable,' citing heightened risks for the sector
after the rapid unraveling of SVB Financial Group fueled fears of
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