Bangkok--19 Aug--Standard & Poor's
Credit quality at U.S. banks has improved slightly over the past six months, but loan demand from creditworthy borrowers continues to be stagnant, according to an article published today by Standard & Poor's, titled "U.S. Financial Corporations' Risks And Opportunities: Positive Developments, But Risk Remains."
"Nonperforming assets as a percentage of the total asset base stabilized or declined slightly in the second quarter across a sample of rated banks, though operating performance remains weak," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research, adding that banks foresee a decline in loan loss provisioning, a sign of their confidence in the credit quality improvement of their loan portfolios.
The recent trend in Standard & Poor's rating actions has reflected our view of these positive developments. Standard & Poor's has downgraded 26 banks or broker-dealers year-to-date, down from 88 downgrades in the first three quarter of 2009. While upgrades have been slow to materialize, the trend in outlooks and CreditWatches is encouraging.
"Overall, we feel that the growing uncertainty around the macroeconomic outlook over the past two months generally has raised the downside risk for credit quality," said Ms. Vazza. "However, there are positives to report, as U.S. banks have taken steps to reduce their overall credit risk."
The report is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760