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DBRS: US trust banks, rated AA (low), could get upgrades

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DBRS: US trust banks, rated AA (low), could get upgrades

U.S. trust banks are already highly rated at DBRS, thanks to their scale and stability. The agency thinks the likelihood "of similar to improved results going forward," however, could push ratings even higher.

DBRS on March 21 issued a report on Bank of New York Mellon Corp., State Street Corp. and Northern Trust Corp., which all have long-term issuer ratings of AA (low) and a "stable" outlook. For comparison, traditional bank peers JPMorgan Chase & Co. and Wells Fargo & Co. are also rated AA (low). U.S. Bancorp, on the other hand, is rated AA.

U.S. trust banks, according to DBRS, are well-positioned in global businesses "that are defensible and sustainable given the significant barriers to entry." And while the banks have had their challenges, problems were "effectively remediated ... with no material ramifications to earnings or reputations." Their biggest issues, such as BNY Mellon's foreign exchange-related settlement of $714 million in March 2015 and State Street's own $530 million accord in July 2016, were much less damaging than Wells Fargo's fake-accounts scandal and JPMorgan's "London Whale" fiasco.