Standard & Poor's Corp. lowered its counterparty credit ratings for 18 U.S. banking companies, pushing five of them into junk territory.

The agency said Wednesday that the banking industry's future will not be as good as its past.

Seven of the banking companies whose ratings were cut underwent the federal government's stress tests this year.

The ratings actions came as the Obama administration detailed its plan that envisions a new regulatory regime for banks. The goal is to strengthen the financial system oversight to prevent another credit crisis.

"Operating conditions for the industry will become less favorable than they were in the past, characterized by greater volatility in financial markets during credit cycles and tighter regulatory supervision," S&P said.

Mitchell Stapley, a chief fixed-income officer at Fifth Third Asset Management, said that even though the impact on the investment-grade bond market was muted, the downgrades illustrate that there is ongoing pressure on banking companies, and that the reconfiguring of that industry is not going to happen overnight. "It will take time."

S&P began its review of the U.S. banking industry's risks in November. "We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions," according to Rodrigo Quintanilla, a credit analyst for the agency. "Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace's new reality.

"Such a transition period justifies lower ratings as industry players implement changes," which include increased regulatory oversight and lower profitability.

The KBW Bank Index fell 3.29% Wednesday.

The companies whose ratings were pushed into junk territory were Carolina First Bank, Citizens Republic Bancorp Inc., Huntington Bancshares Inc., Synovus Financial Corp. and Whitney Holding Corp.

Synovus received the biggest cut. Its rating fell five notches, to BB-minus, or three steps into junk territory.

The other companies that were downgraded included BB&T Corp., Capital One Financial Corp., Fifth Third Bancorp, KeyCorp, Regions Financial Corp., U.S. Bancorp and Wells Fargo & Co. Those seven companies were among the 19 that underwent the government's stress tests.

S&P said it also reassessed companies' relative creditworthiness "based on their abilities to deal with the increased risks during this transition period."

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