NEW YORK – First Republic Bank was downgraded again on Sunday by S&P Global, days after it cut the rating to junk, with the ratings firm saying the US lender’s US$30 billion (S$40 billion) rescue may not solve its longer-term liquidity problems.

S&P lowered First Republic’s long-term issuer credit rating to B+ from BB+, confirming an earlier Bloomberg report.

In explaining its rationale for Sunday’s action, S&P said First Republic’s rating “remains on CreditWatch negative, indicating we could lower the rating further if the bank is unable to demonstrate some progress in stabilising deposits and recovering the franchise value that, in our view, has likely eroded”.

“We do not view this deposit infusion – which has initial maturity of 120 days – as a longer-term solution to the bank’s funding issues,” S&P analysts wrote. “Attracting meaningful deposits will be difficult, constraining the bank’s business position.”

Following Thursday’s uninsured deposit of US$30 billion by the 11 largest banks in the United States, together with cash on hand, First Republic said it is “well positioned to manage short-term deposit activity”.

Sunday’s downgrade by S&P was the second in four days for First Republic, which previously held an A- credit rating. It could add to market concerns about the mid-sized bank, following this month’s collapse of Silicon Valley Bank, a big lender to start-ups and the tech industry, and crypto-focused Signature Bank.

Another ratings agency, Moody’s Investors Service, downgraded First Republic to junk status on Friday. BLOOMBERG