Standard & Poor’s Ratings Services (S&P) has upgraded its outlook on four U.S. banks to “positive” from “stable”, reflecting its view that risks facing the sector are now easing.
The rating agency says that it believes economic risks in the U.S. banking sector are declining based on its expectation that “housing and private-sector domestic credit will continue to grow, and credit losses are close to bottoming out”.
As a result, it has assigned a positive trend to its assessment of U.S. economic risk. “Although the anticipated recovery is not devoid of risks, the positive trend indicates that we believe there is at least a one-in-three likelihood that the economic risks in the U.S. will decline in the next six months to two years,” it explains.
S&P revised the outlooks on BancorpSouth Inc., Huntington Bancshares Inc., Regions Financial Corp., and Susquehanna Bancshares Inc. to positive from stable, and bumped up the outlooks on Citigroup’s operating subsidiaries and Zions to “stable” from “negative:. It also affirmed the ratings on each bank.
“The outlook actions reflect our view that these banks are well positioned not only in terms of capital, but also other bank-specific factors including asset quality, profitability, and business stability relative to peers,” it says.