Is Pacwest short of autumn? Bank stocks fall by 22 % due to the decline in deposits
Is Pacwest short of autumn? Bank stocks fall by 22 % due to the decline in deposits
The Californian lender Pacwest Bancorp (PACW) collapsed by over 20 % on Thursday after the company announced that there had been lost a significant part of its deposits.
This follows a number of bankruptcies in US regional banks this year, which preceded similar warning signals.
insert flee in front of Pacwest
according to his quarterly report submitted to the Securities and Exchange Commission, Pacwest stated that his deposits decreased by 9.5 % last week-mainly on May 4th and 5th. According to the bank, this was a reaction to "increased market and customer fears" after the first Republic Bank was closed by the supervisory authorities on May 1st.
"In the afternoon of May 3, 2023, Pacwest was prominently represented in the headlines of the financial news with reports that Pacwest" checks all options and have discussions with potential investors and partners, "wrote the company. "The headlines reinforced the fears of our customers for the security of their deposits."
under the Many banks pacwest was captured by the fear in the banking sector during the fall of the first republic. In the week from April 28th to May 5th, the share price fell from $ 10.15 to $ 5.96 and is traded on Thursday for $ 4.70.
The bank made it clear that it had already financed the decline in its deposits with available balance sheet liquidity. On May 10, the company had immediately available liquidity of $ 15 billion compared to non-insured deposits of $ 5.2 billion, which corresponds to a cover rate of 288 %.
A large part of this liquidity came from the promise of $ 5.1 billion on Wednesday for the discount window of the Federal Reserve, which Pacwest gave another $ 3.9 billion in additional credit capacity.
Pacwest was also hit hard by the front row of bank bankruptcies in March, which Silvergate, Signature Bank and Silicon Valley Bank (SVB) had affected. The event initiated Pacwest Lot 47 % the day after saving the SVB inserts and the loss of deposits that could cover the insolence of the federal government.
In the first quarter, Pacwest deposits fell by 16.9 %-or $ 5.7 billion.
"These recent events and the continuous reporting on these events have increased certain risks and uncertainties in connection with our business and our future prospects," said the bank.
The current state of the banks
also the Boenix-based bank Western Alliance (Wal) experienced significant fluctuations after the bankruptcies in March and lost a whopping 76 %on March 13. After the first republic crash, her share slipped 20 % on May 2 from $ 36.18 to $ 28.96. It is currently being traded for $ 28.96.
The bank appeared , however, the company cuts off better than Pacwest and reports an increase in the insoles by $ 600 million.
After the failure of first republic, Bitmex co-founder Arthur Hayes predicted that Pacwest would be the next bank that would fail in the ongoing banking crisis. "I guess we know who is killed next by the FDIC," he said tweeted as a reaction to the falling stock prices.
Last week, US Senator John Kennedy referred are referred to as "sophisticated snowball systems", since they rely on the trust of their insert are.
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