Fitch downgrades NY Community Bancorp to BB+, outlook negative

(Reuters) – Fitch Ratings has downgraded New York Community Bancorp and its bank subsidiary Flagstar Bank to ‘BB+’/’B’ from ‘BBB-‘/’F3’.

Fitch earlier in February had already downgraded long-term issuer default ratings (IDRs) for New York Community Bancorp to ‘BBB-‘ from ‘BBB’.

Fitch said its decision came from reassessing NYCB’s risk profile, following NYCB’s announcement of a material weakness in the company’s internal controls related to an internal loan review. The agency added its rating outlook on the bank is negative.

Several other firms have downgraded the embattled lender, including Morningstar DBRS that downgraded the bank’s credit rating due to “outsized” exposure to commercial real estate (CRE). Moody’s has already cut their ratings.

Fitch said it positively viewed Thursday’s appointment of Alessandro Dinello as CEO, given his tenure as CEO of Flagstar Bancorp.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Josie Kao)