S&P hikes Stifel

S&P said it raised its ratings on Stifel Financial Corp. and its senior unsecured debt to BBB from BBB-. At the same time, the agency upgraded Stifel's preferred stock to BB from BB-.

“Our upgrade of Stifel incorporates our view that its risk management is aligned with that of its peers. Stifel's risk profile is supported by its sound credit and interest rate risk management, which has translated into low credit risk losses and low unrealized losses in its investment portfolio during a period of high and rising interest rates. The upgrade also considers the company's capitalization, business diversity, sound risk-adjusted returns, funding, and liquidity relative to those of its securities firm peers,” the agency said in a press release.

S&P noted that reduced its commercial lending in 2023, to 18.3% of total loans from 23.8%, but that the loans are “overwhelmingly secured by generally solid collateral.”

Additionally, “We still view Stifel's funding and liquidity position as a strength for the rating. Stifel's deposit base is very granular, with only about 15% of deposits being uninsured as of Dec. 31, 2023. Stifel attracted some larger individual commercial deposit flows because of last year's market turmoil, increasing the proportion of uninsured deposits at Stifel from 12% of total deposits to 15% (which is still much lower than at many other banks),” S&P said.

The outlook is stable.

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