Thursday, March 7, 2013

BB&T's outlook downgraded to 'negative'

Concerned about "weaker internal controls" at BB&T, Moody's Investors Service has downgraded its outlook for the bank from stable to negative.

The setback for BB&T stems from the bank revealing in its annual report Friday that it needed to adjust its calculation of risk-weighted assets related to unfunded lending commitments, Moody's said.

"This reflects weaker internal controls than Moody's expected for a bank with BB&T's strong track record," Moody's said. "Specifically, BB&T is highly rated when compared to both U.S. and global peers, and its failure to conform to longstanding regulatory guidance is a concern."

The downgrading comes as Winston-Salem-based BB&T wages a court battle with the Internal Revenue Service over the bank's use of foreign tax credits. BB&T is challenging the IRS over the bank's 2002-07 use of the credits and hoping to get back $892 million in penalties and other related payments it made to the agency in 2010 after the credits were disallowed.

Even though Moody's downgraded its outlook for BB&T, it affirmed its ratings for the bank, including its A2 senior debt rating, A1 deposit rating and a1 baseline credit assessment.

Also, on Thursday, BB&T was among banks that passed a federal "stress test," mandated by the Dodd-Frank financial reform law.


Ettolrahc said...

That happens when you are a play by the rules and treat your customers and corporate customers fairly.

The government and others look at you like you are not with it today.

Maybe they need to donate millions to the DNC and the like next time.

Anonymous said...

This while Kelly King gets a 59% raise?