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Shares of U.S. banks fell in premarket trading on Tuesday after Moody's downgrade of 10 mid-sized lenders reignited investor concerns about challenges facing the banking industry. The...
"The overnight news doesn't really dent our view on U.S. banks because we have been favoring quality and liquidity as a whole, our view on the broader sector still remains constructive," said Georgios Leontaris, chief investment officer for Switzerland and EMEA at HSBC Global Private Banking and Wealth
(Reuters) -Global bank shares skidded on Tuesday after Moody's downgraded 10 mid-sized U.S. banks and Italy approved a surprise 40% windfall tax on lenders, with the double-blow reigniting concerns about the challenges facing the industry. The sector has been looking to emerge from a crisis that took down three U.S. banks earlier this year and triggered a loss of confidence that engulfed Credit Suisse, which was bought out by rival UBS Group AG in a rescue deal. Investors worried that other countries would follow suit after Italy's action.
Italy dealt a surprise blow to its banks and sent shockwaves across the sector in Europe by setting a one-off 40% tax on profits reaped from higher interest rates, after reprimanding lenders for failing to reward depositors.
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The rating agency said rising funding costs, a possible decline in deposit levels and weaker profitability pose risks to the banking sector, which went through a crisis earlier this year after the collapse of three lenders