In the US stock market on the 4thPacwest Bancorp andWestern Alliance Bancorp,Selling of bank stocks resumed, led by First Horizon. Investor concerns in the sector have risen anew after several bank failures in recent months.
Pacwest plunged 57% at one point. The bank confirmed that it is in talks with several potential investors. Western Alliance fell 62% at one point and was suspended multiple times. The Financial Times reported that it is considering several options, including selling the entire company or some of its businesses. The bank denied the report was “totally false.” The KBW regional bank stock index fell 6.8% at one point, down 33% since the beginning of the year.
Western Alliance says coverage of option review ‘totally false’
First Horizon temporarily fell 40%. Bank of Canada’s Toronto-Dominion (TD) said it had “both sides agreed” to cancel a merger plan announced last year. He cited the uncertainty surrounding regulatory approval.
PacWest’s deposit balance has increased since March;
US regional bank Western Alliance considers multiple options including sale – report
TD and First Horizon Agree to End $13 Billion Merger
“Banks are at a game stop, with social media fueling non-traditional approaches and scrutinizing solvency,” TD Cowen analyst Jarrett Seiberg said in a report. . “The pressure on stocks is actually driving down stocks, leading to more skepticism,” he wrote.
Source: Bloomberg
Activist investor Bill Ackman, founder of hedge-fund firm Pershing Square, warned that the stress in the banking system isn’t over anytime soon.
Ackman Says U.S. Regional Bank System Is in Crisis Without Renewal of Deposit Insurance Program
Federal Reserve Chairman Jerome Powell said on Thursday that the sale of First Republic Bank to JPMorgan Chase after it was taken under public control was a “phase of severe stress” for regional banks. It will be an important step to put an end to the
“We think the recent sell-off in regional bank stocks has been overdone. “While we continue to recognize that challenges lie ahead due to the normalization of funding costs and credit losses, investor sentiment around the more stressful first quarter financial results and stabilization of deposits It should have allayed concerns,” he continued.
Original title:Regional Banks Extend Rout as PacWest, Western Alliance Sink (2)(excerpt)
2023-05-04 15:16:00
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