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CORRECTED - S&P cuts credit ratings on 18 US banks

Wed Jun 17, 2009 4:30pm EDT

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(Corrects to show 18 banks were downgraded)

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LONDON, June 17 (Reuters) - Standard & Poor's on Wednesday cut its ratings on 18 banks citing expectations of more difficult operating conditions due to volatile financial markets and tighter regulation.

Among the rating changes, S&P cut the counterparty credit ratings of Wells Fargo & Co (WFC.N) by one notch to AA-minus, U.S. Bancorp by two notches to A-plus and Fifth Third Bancorp (FITB.O) by two notches to BBB.

S&P also downgraded the counterparty credit ratings of Huntington Bancshares (HBAN.O) and Carolina First Bank by two notches to junk-status BB-plus with a negative outlook. It also cut Citizens Republic Bancorp (CRBC.O) counterparty credit rating by three notches to BB-minus with a negative outlook [ID:nWLA6796].

"We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions," said Standard & Poor's credit analyst Rodrigo Quintanilla.

"Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace's new reality. Such a transition period justifies lower ratings as industry players implement changes." (Reporting by Natalie Harrison; Editing by Hans Peters)

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