Morningstar DBRS downgrades NYCB by a
notch on near-term earnings pressure
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[March 08, 2024]
(Reuters) - Morningstar DBRS downgraded the credit ratings of New
York Community Bancorp to "BBB (low)" from "BBB", citing near-term
pressure on earnings, the ratings agency said late on Thursday.
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A screen displays the trading information for New York Community Bancorp
on the floor at the New York Stock Exchange (NYSE) in New York City,
U.S., January 31, 2024. REUTERS/Brendan McDermid/File Photo/File Photo |
The
company, which cut its rating in February pointing to the
lender's "outsized" exposure to commercial real estate loans
compared to its peers, also said the trend on all credit ratings
is now stable.
Rival Moody's has also changed the direction of its rating view
of NYCB to "review for upgrade" from "review for downgrade".
NYCB on Wednesday raised $1 billion from investors, including
former U.S. Treasury Secretary Steven Mnuchin's Liberty
Strategic Capital, and named a former Comptroller of the
Currency its new CEO.
"The recently announced management change and capital raise from
high-profile and experienced investors should help restore
confidence in the company after a string of unexpected adverse
announcements," Morningstar DBRS said.
Shares in the bank, up in the last three sessions on improving
investor sentiment and the capital infusion, remain down more
than 60% for the year. The stock was last up 3% in premarket
trading on Friday.
NYCB also disclosed a 7% drop in deposits over the past month
and reduced its quarterly dividend for the second time since
January on Thursday.
The bank came under renewed pressure last week when it disclosed
"material weakness" in internal controls and revised its loss to
more than 10 times of what was previously disclosed.
(Reporting by Manya Saini in Bengaluru; Editing by Sriraj
Kalluvila)
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