Moody's lowers rating on U.S. Bancorp one notch
- Article by: PATRICK KENNEDY
- Star Tribune
- May 3, 2013 - 11:40 AM
Citing U.S. Bancorp's increased dependence on mortgage income and challenging conditions for the banking industry in general, Moody's Investors Services Thursday downgraded its senior-debt rating by one notch.
The senior-debt rating was lowered to A1 from Aa3. Related ratings for its lead operating bank, U.S. Bank National Association, and its long-term deposit rating also were lowered. Moody's called its outlook on U.S. Bancorp "stable.''
Moody's said the downgrade "reflects the inescapable challenges that even a well-managed and diverse banking franchise currently faces." Moody's analysts pointed to low interest rates and the fact U.S. Bancorp "has increased its dependence on potentially volatile mortgage banking income."
Moody's said the Minneapolis-based bank's recent growth in mortgage banking "has been well-timed" but with the increased mortgage banking business comes increased regulatory and political attention.
Despite the downgrade Moody's added: "U.S. Bancorp continues to be one of Moody's highest-rated banks, both domestically and globally." The Minneapolis-based bank's ratings have been under review by Moody's since Sept. 20.
"We remain Moody's highest-rated large bank," US Bancorp spokesman Thomas Joyce said of the rating change . "We're still a notch above any other large bank."
Patrick Kennedy • 612-673-7926
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