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U.S. Regional Bank Stocks Steady After Brutal Sell-Off
- By The Financial District
- Feb 6, 2024
- 1 min read
US regional bank stocks recovered slightly after a two-day plunge sparked by investor concerns that New York Community Bancorp's dismal earnings signaled broader problems in the sector, as reported by Niket Nishant for Reuters.
Fitch's ratings outlook on NYCB is negative. I Photo: Tdorante10
The KBW Regional Banking Index gained 0.2%, snapping a three-day losing streak. NYCB shares rose 5% on Friday after sinking 45% over the past two sessions.
On Wednesday, the lender cut its dividend and posted a surprise loss on commercial real estate (CRE) loans.
Fitch downgraded the Long-Term Issuer Default Ratings (IDRs) for the lender and its subsidiary Flagstar Bank to BBB- from BBB on Friday, citing the CRE loan impairment and increase in loan loss provisions. Its ratings outlook on NYCB is negative.
"Additionally, actions, including higher levels of on-balance sheet liquidity requiring higher wholesale funding, will also negatively affect the bank's profitability in 2024," the ratings agency added.
