Ratings agency Moody’s on Saturday downgraded the credit of First Republic Bank, citing deterioration in the bank’s financial profile and challenges faced by the lender due to increased reliance on funding amid deposit outflows.
The agency cut the bank’s long-term issuer rating and local currency subordinate ratings to B2 from Baa1 and long-term local currency bank deposit rating to Baa3 from A1, among others.
“The outlook on the issuer rating and long-term bank deposits of First Republic Bank remain under review,” Moody’s said.
It believes the bank’s high cost of borrowings, along with the “high proportion of fixed rate assets at the bank.
