S&P downgrades scores of US banks as rate hikes bite

Banks have been forced to pay out higher interest to keep depositors from fleeing to other high-yielding alternatives

The collapse of Silicon Valley Bank earlier this year set alarm bells ringing. File picture

S&P Global followed Moody's in cutting its credit ratings and outlook on multiple US regional banks, saying higher funding costs and troubles in commercial property will likely test the credit strength of lenders.

A relentless rate-hike campaign by the US Federal Reserve has raised deposit costs at banks, which have been forced to pay out higher interest to keep depositors from fleeing to other high-yielding alternatives.