Fitch Ratings has affirmed its Issuer Default Ratings (IDRs)
on 14 large regional banks. This follows a thorough review of the
BB&T CORP (BBT): Free Stock Analysis
COMERICA INC (CMA): Free Stock Analysis
CAPITAL ONE FIN (COF): Free Stock Analysis
FIFTH THIRD BK (FITB): Free Stock Analysis
HUNTINGTON BANC (HBAN): Free Stock Analysis
KEYCORP NEW (KEY): Free Stock Analysis Report
M&T BANK CORP (MTB): Free Stock Analysis
REGIONS FINL CP (RF): Free Stock Analysis
SUNTRUST BKS (STI): Free Stock Analysis
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
ZIONS BANCORP (ZION): Free Stock Analysis
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The banks include
Capital One Finance Corp.
Fifth Third Bancorp
Huntington Bancshares Incorporated
M&T Bank Corporation
PNC Financial Services Group Inc
Regions Financial Corp.
SunTrust Banks Inc.
Wells Fargo & Company
), UnionBanCal Corporation and
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.