An analysis of first-quarter call report data for the nation's 2,129 thrift institutions conducted by Veribanc, Inc., the bank rating
company, found the industry registered a profit of $1.1 billion, the first time the industry as a whole has been profitable since the first quarter of 1987.
"Fitch expects its negative bank rating
actions during the coming year to be concentrated in peripheral eurozone economies, as stress in these economies undermines confidence in the region," says Bridget Gandy, co-Head of EMEA Financial Institutions at Fitch in London.
Veribanc, a bank rating
company, calculates that the discounted net worth of the entire S&L industry, including institutions under Resolution Trust Company (RTC) control, exceeded $5 billion, the first positive assessment since 1988.
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After analyzing the Federal Reserve Board second-quarter call data collected from the nation's 12,606 commercial and savings banks, Veribanc, the bank rating
company, finds the downward spiral in real estate in continuing and may do so for some time.
Downgrades were dominated by emerging markets in the Americas and the Middle East and Africa, continuing the recent theme of bank rating
trends being generally more negative in emerging markets.More than half of all downgrades were driven by sovereign downgrades in Brazil and Bahrain, reflecting either challenges posed by weaker operating environments in these markets or the reduced ability of authorities or foreign parents to provide support.The share of Stable Outlooks stayed at around 80%, while the balance between Positive and Negative Outlooks/Watches improved further in 1H18.
The rating actions follow the publication of Fitch's updated bank rating
criteria, which introduced + and - modifiers at the 'ccc' level for VRs (see "Fitch Publishes Updated Global Bank Rating
Criteria" dated 23 March 2018).
The upgrade follows the introduction of '+' and '-' modifiers to 'CCC' Long-Term Issuer Default Ratings (and long-term debt ratings), as per Fitch's Bank Rating
Criteria published on 23 March 2018.
If either the underlying bond rating or the bank rating
were downgraded to 'A-' or lower, the dual-party pay criteria could no longer be applied, and the long term rating assigned to the bonds would then be adjusted to the higher of the bank rating
and the underlying bond rating.
The notes' rating is also subject to change should Fitch's final Bank Rating
Criteria deviate from the Exposure Draft: Bank Rating
Criteria (see "Fitch Publishes Bank Rating
Criteria Exposure Draft" dated 12 December 2017) under which the notes are rated.
On 14 December 2017 Fitch placed on RWE the banks' VRs, following the publication of the Exposure Draft: Bank Rating
Criteria (see "Fitch Places Certain Bank Ratings
on Rating Watch on Criteria Exposure Draft" available at www.fitchratings.com).
Our latest Global Quarterly Bank Rating
Trends report, available by clicking on the link above, highlights the relative stability of DM bank ratings