US banks fall, all eyes on Fed stress test results

PacWest Bancorp

28/06/2023 15:07

** Shares of economy-sensitive U.S. banks fall in morning
trading ahead of the Federal Reserve's stress test results due
after markets close on Wednesday 
    ** JPMorgan Chase & Co  JPM.N , Wells Fargo & Co  WFC.N ,
Morgan Stanley  MS.N , Citigroup  C.N  and Bank of America Corp
 BAC.N  fall between ~0.3% and ~0.7%
    ** Regional lenders: Citizens Financial Group  CFG.N , First
Horizon  FHN.N , Comerica Inc  CMA.N , PacWest Bancorp  PACW.O ,
U.S. Bancorp  USB.N , KeyCorp  KEY.N  down between ~1% and ~1.9%
    ** The stress tests, introduced after the 2008 financial
crisis, dictate how much capital banks need to be healthy and
how much they can return to shareholders
    ** Under the "stress test" exercise, the Fed tests big
banks' balance sheets against a hypothetical severe economic
downturn, the elements of which change annually 
    ** The results will come months after the biggest meltdown
in the banking sector since the 2008 financial crisis, which
many blame in part on Fed's relentless interest rate hikes to
rein in inflation
    ** As of last close, S&P 500 Banks Index  .SPXBK  is down
11.75% YTD, underperforming a 14.04% rise in the benchmark S&P
500 Index  .SPX 
    ** KBW Regional Banking Index  .KRX  has declined 24.1% over
the same period 

 (Reporting by Manya Saini in Bengaluru)
 ((Manya.Saini@thomsonreuters.com))