Fitch Ratings warned that it may downgrade the ratings of nine major banks on Friday, due to their vulnerability to deteriorating loan quality as the recession drags on.
Discover Financial Services
on ratings watch negative. The move affects all ratings except for support ratings, support flows and the short-term ratings of Wells and BB&T.
Fitch first announced a review of bank ratings on May 7, and said on Friday that it expects the firms' earnings to remain under stress as loan losses continue to accrue. It expects the majority of downgrades to be one notch, though certain hybrid instruments may be lowered more than one.
The ratings agency expects to complete the review within the next month.