I was reading that Moody placed US Bank on review for downgrade. What does this mean and should something like this be concerning for employees?
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Think of it this way. US Bank had to raise $3.5 B to address the capital ratio deficiency. Then it was reported that MUFG invested $960M into US Bank pushing their ownership up to 4.4 % from 2.2% . It also was reported it was to help US Bank pay back $3.4B to MUFG that US Bank borrowed out of the deal and has to be paid back in less than 5 years. So long answer short , Yes employees should be worried.
As long as that soulless tw-t, Greedy Andy and McKinsey & Company are allowed to destroy U.S. Bank, all employees should be concerned.
Banks are already forced to keep more capital on hand through Basel 4.
https://www.cnbc.com/2023/08/09/moodys-bank-downgrade-in-charts-us-bank-fifth-third-others-under-review-.html
Well, it isn't really specific to U.S. Bank and we don't have a lot of office real estate. However, a downgrade could make our cost of capital increase. U.S. Bank will not cut the dividend, so cutting employees is the only thing they can do to save money. It sort of depends when the regulators make us increase capital. If we don't go into recession I figure it will take 5 quarters or so of retained earnings after dividends to get the capital ratios to the large bank levels.
The bottom line. Yes. It could affect employment.