Priya Patel
TLDR: Shares in New York Community Bancorp (NYCB) have plummeted, causing concern in the regional banking sector in the US. The stock has fallen more than 60% to its lowest level in decades, following a surprise quarterly loss and dividend cut. NYCB released a mid-quarter update on its financial health and appointed Alessandro DiNello as executive chairman in an effort to reassure investors, but the stock remains volatile. Moody’s downgraded NYCB’s long-term debt ratings to junk status and concerns about exposure to the commercial real estate market persist. Other regional banking stocks have also come under pressure.
New York Community Bancorp (NYCB) shares are continuing to drop, which is causing unease in the US regional banking sector. The bank’s stock has fallen by over 60% recently, hitting its lowest level in decades. NYCB initially caused alarm on Wall Street by revealing a surprise quarterly loss and cutting its dividend for shareholders. Last May, the collapse of Silicon Valley Bank (SVB) triggered a regional banking crisis that impacted the industry. In an attempt to address concerns, NYCB released a mid-quarter update on its financial health on Tuesday, and it has announced that banking industry veteran Alessandro DiNello will become its executive chairman. Despite this, trading of the bank’s stock remains volatile.
Last week, NYCB revealed a $252m loss and a $552m provision for credit losses, raising worries about its exposure to the commercial real estate market. Moody’s Investors Service downgraded the bank’s long-term debt ratings to junk status on Tuesday evening. Other regional banking stocks have also come under pressure in recent days. DiNello has acknowledged that the lender is in a “serious situation”. NYCB grew significantly last year, with its assets reaching over $100bn after acquiring the assets of failed Signature Bank. However, the bank’s deposit base has grown, according to DiNello.
Keywords: New York Community Bancorp, NYCB, regional banking, stock market, Silicon Valley Bank, Wall Street
