Fitch downgrades New York Community Bancorp to 'BB' on near-term earnings pressure
(Reuters) -Fitch Ratings on Tuesday downgraded embattled regional lender New York Community Bancorp and its bank subsidiary, Flagstar Bank, to 'BB' from 'BB+'.
The ratings agency said the downgrade reflects its assessment that NYCB has a weaker earnings and profitability profile coupled with the execution risk associated with its restructuring plan.
Last week, NYCB reported a first-quarter loss of $327 million, or 45 cents per share, as the lender set aside higher provision for credit losses due to its exposure to the beleaguered commercial real estate sector.
The lender had said it expected annual loss to be between 50 cents and 55 cents in 2024, indicating there will be little relief in the near-term as it anticipates an elevated level of loan loss provision over the remainder of the year.
Fitch, however, said its rating outlook on the bank is positive as the risks over the rating horizon have stabilized.
The ratings agency said that it anticipates NYCB's realized losses will unfold over time and are likely to exceed those of peers given its weakening asset quality.
Fitch had earlier in March downgraded NYCB's long-term issuer default ratings (IDRs) to 'BB+'/'B' from 'BBB-'/'F3'.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shailesh Kuber)