Shares of US regional banks attempt recovery after SVB-fueled rout (updated)

Heritage Financial

14/03/2023 13:08

(Adds shares of Big Banks, comment, updates share movement)
    By Medha Singh
       March 14 (Reuters) - Shares of U.S. regional banks rose
in premarket trading on Tuesday after suffering double-digit
losses over the past few days following the biggest bank
collapse since the 2008 global financial crisis. 
    The collapse of Silicon Valley Bank  SIVB.O  and Signature
Bank  SBNY.O  sent shockwaves through global markets,
particularly hammering banking sector shares, despite assurances
from U.S. President Joe Biden and other policymakers that banks
and deposits were safe.
    First Republic Bank  FRC.N  rose 58%, a day after hitting an
intraday record low of $17.53. 
    Western Alliance Bancorp  WAL.N , Citizens Financial Group
 CFG.N , KeyCorp  KEY.N , Comerica Inc  CMA.N , Fifth Third
Bancorp  FITB.O , Truist Financial Corp  TFC.N  and Zions
Bancorp  ZION.O  jumped between 8% and 42%.
    The S&P 1500 regional banks sub-industry index  .SPCOMBNKS 
has tumbled 20% in the past three sessions.
    Rating's agency Moody's said it was reviewing six lenders
for a downgrade including First Republic, Zions Bancorp, Western
Alliance Bancorp and Comerica.
    "The contagion risk is still present if everyone
simultaneously loses confidence in the banking system. If we do
not see any high-profile failures in the near future, then the
fears would subside," said Jack Ablin, chief investment officer
at Cresset Capital.
    Some industry executives and advisers believe small lenders
could be forced to seek saviors if a rout in their stocks does
not let up.  urn:newsml:reuters.com:*:nL1N35M0NV
    "Though those banks with higher capital ratios, smaller
pools of securities relative to total assets, strong brands, and
diversified funding sources should be better able to weather the
current market dynamics," said UBS Global Wealth Management
Chief Investment Officer Mark Haefele in a note.
    Meanwhile, a media report said a wave of customers have
applied to shift their accounts to large U.S. banks such as
JPMorgan Chase & Co  JPM.N  and Citigroup Inc  C.N  from smaller
lenders after the collapse of Silicon Valley Bank.
    Big banks rose with JPMorgan up 1.8%, Wells Fargo  WFC.N 
3.2% and Bank of America  BAC.N  4%.

 (Reporting by Medha Singh in Bengaluru, additional reporting by
Shristi Achar; Editing by Shinjini Ganguli)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; Twitter: https://twitter.com/medhasinghs;))