Following the acquisition of First Republic Bank by JPMorgan Chase, several regional banks such as Pacwest and Western Alliance experienced a significant drop in their stock prices. On Tuesday afternoon, all four major U.S. benchmark stock indexes are in decline as regional bank stocks hit new lows.
Pacwest, a regional bank based in Beverly Hills, California, is facing challenges after the release of its 2023 first quarter earnings report. Following the publication of the earnings, the bank’s stock price plummeted by 35% on Tuesday at 11:00 er. Eastern Time. The earnings report revealed a “net loss available to common stockholders of $1.21 milliard, or a loss of $10.22 per diluted share.”
The upheaval at Pacwest comes on the heels of First Republic Bank’s recent collapse and three major bank failures that occurred in March. Despite three out of these four banks representing the largest bank failures in the United States, President Joe Biden reassured the public on Monday that the banking industry is on track toward “stabilization.”
Besides Pacwest shares dropping over 35%, trading was halted due to volatility concerns. Other banks experiencing losses on Tuesday include Western Alliance and Metropolitan Bank, whose stocks have also seen sharp declines during today’s trading sessions. Amidst this turmoil within bank equities, CFRA analyst Alexander Yokum fortalte Marketwatch that while taxpayers will not be responsible for these failures, financial institutions are likely to increase fees.
“All the costs of bank failures will be borne by banks and not taxpayers, although we expect banks to indirectly pass along many of these costs to customers through higher fees and higher interest rates on loans,” Yokum stated.
The collapse of First Republic Bank has left Wall Street investors uneasy, even though JPMorgan Chase CEO Jamie Dimon declared on Monday that “this part of the crisis is over” after taking over the struggling bank. While conventional equity markets are down, cryptocurrencies and precious metals have experienced growth amidst the banking industry’s tribulations.
Notably, the top two leading cryptocurrencies, bitcoin (BTC) and ethereum (ETH) increased af den digitale valutaøkonomi med 1.1% til 1.5% in the wake of Wall Street’s turmoil. Concurrently, the precious metals gold and silver have also surged in value against the U.S. dollar, with gains ranging between 1.4% og 1.54%.
After sinking more than 35% på tirsdag, Pacwest shares rebounded and are currently down between 22% til 27% against the greenback.
What do you think the future holds for the U.S. banking industry? Share your thoughts in the comments section below.
Billedkreditter: Shutterstock, Pixabay, Wiki Commons, JHVEPhoto / Shutterstock.com
Ansvarsfraskrivelse: Denne artikel er kun til informationsformål. Det er ikke et direkte tilbud eller opfordring til et tilbud om at købe eller sælge, eller en anbefaling eller godkendelse af produkter, tjenester, eller virksomheder. Bitcoin-Tidings.com giver ikke investeringer, skat, gyldige, eller regnskabsrådgivning. Hverken virksomheden eller forfatteren er ansvarlig, direkte eller indirekte, for enhver skade eller tab forårsaget eller påstået at være forårsaget af eller i forbindelse med brugen af eller tilliden til noget indhold, varer eller tjenesteydelser nævnt i denne artikel.