The bank that saved failed Signature Bank has fallen sharply on Wall Street. The oil fund owned over 1 percent at the end of last year.
TOOK OVER CRISIS BANK: New York Community Bank took over distressed Signature Bank when there was turmoil in the sector last year. Here a branch in New York. Photo: MIKE SEGAR / Reuters / NTBPublished: Published:
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The market value of the regional bank New York Community BancorpNew York Community Bancorp, owner of the regional banks New York Community Bank and Flagstar Bank (NYCB), has almost halved in recent days.
The oil fund owned 1.05 per cent of the bank at the end of last year, recently published figures show. The ownership stake was then worth around NOK 788 million.
Now, on paper, the Oil Fund’s values in the bank may have been reduced by several hundred million kroner, if the ownership has not changed since New Year’s Eve.
The fund may have bought or sold shares during the period.
The Norwegian Oil Fund has no comments on the matter.
Last year, the fund increased its ownership in the bank, from 0.84 per cent at the end of 2022.
The development in individual shares has little to do with the value of the over NOK 16,000 billion fund, which is constantly setting new records and is widely invested to reduce the risk of losing money.
However, the price collapse is a reminder of last year’s bank collapse, which provoked strong reactions from the fund.
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These funds get a roll of the dice now
Therefore, the stock falls
NYCB reported large losses related to commercial real estate on Wednesday, which shocked investors.
The share price fell a record 38 percent on Wednesday this week, according to New York Times to the lowest in 25 years.
On Thursday, the fall continued, when the share was down 11 percent.
On Friday, the share recovered somewhat and is up around 5 percent.
NYCB has taken $185 million in losses on just two loans and is setting aside more than $500 million to cover possible loan losses. The amounts correspond to NOK 1.9 and 5.2 billion, respectively.
Since the loss notice, there has been a broader price decline for US regional banks.
The US commercial real estate market has a double problem, in that interest costs are increasing at the same time as fewer people are working from the office after the pandemic.
– We expect more stress this year as loan deferrals stop. Many borrowers will be forced to either inject new capital, let the banks take over assets or sell in a weak market, says Kiran Raichura, economist with responsibility for property at the analysis house Capital Economics, to Financial Times.
Last year, NYCB’s share price rose after the bank rescued failed Signature Bank.
– A deviation
The oil fund felt the turmoil in the banking sector. The fund will lead a class action against Silicon Valley Bank, which collapsed and caused the fund to lose billions of dollars.
CEO Bruce Van Saun of the American bank Citizens Financial Group does not think this is the start of a similar situation.
– Everything is mostly in the rearview mirror now. Things are starting to feel more normal. The message from NYCB was a bit of a surprise. I think it’s a deviation, says Saun Bloomberg.
On average, the Oil Fund owns 1.5 percent of all listed companies in the world.
This means that at the turn of the year the fund owned a smaller share of NYCB than the fund does on average in the companies it owns shares in.
2024-02-02 21:11:01
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