Several regional banks in the United States saw a significant decline in their stock values during after-hours trading on May 4, 2023.
Several regional banks in the United States saw a significant decline in their stock values during after-hours trading on May 4, 2023. PacWest Bancorp, in particular, suffered a 52.5% drop, and this has led the bank to consider some strategic options.
According to Bloomberg, PacWest Bancorp is exploring options such as raising capital or a potential breakup. However, no official auction process has been initiated, and the company has not confirmed such plans.
Other regional banks that experienced substantial losses include Western Alliance Bancorp (-22.4%), Metropolitan Bank (-16.2%), and HomeStreet (-7.8%). Notably, two of these banks had ties with the crypto industry. Western Alliance Bancorp operates a blockchain and digital asset division, which provides clients with blockchain-based payment solutions. Metropolitan Bank previously served cryptocurrency firms, but the bank shut down its digital asset vertical in January 2018 because it was dissatisfied with the cryptocurrency industry’s development.
Crypto gaining momentum as US Regional Bank stocks tumble after hours:
PacWest, $PACW:60%
Western Alliance, $WAL:30%
Metropolitan Bank, $MCB:20%
Valley National, $VLY:15%
HomeStreet, $HMST:11%
Zions Bank, $ZION:10%
KeyCorp, $KEY:8%Seems like time to #HODL— Acquire.Fi (@Acquire_Fi) May 4, 2023
Interestingly, barely hours before the market turmoil, Federal Reserve Chairman Jerome Powell delivered a speech praising the resilience of the U.S. banking sector. Powell tried to allay concerns about the industry while announcing that the Federal Reserve would raise interest rates by 25 basis points. He emphasized that the banking industry had shown significant improvement since March and that the U.S. banking system was strong and adaptable. Powell also assured his audience that the Fed closely monitors the sector to ensure stability and growth.
The news of the declining share values of several regional banks has sparked concerns about the overall health of the banking industry, especially in the wake of the recent collapses of Signature Bank, Silicon Valley Bank, and Silvergate Bank. Some industry observers fear that PacWest Bancorp could become another casualty of the ongoing banking crisis in the United States. @WallStreetSilv, a social media influencer, suggested that the bank is probably experiencing a bank run and speculated that the U.S. FDIC would likely close the bank on Friday.
PACWEST now down 54% after hours. $PACWBank run is probably on for deposits.
Probably will be closed on Friday by the FDIC.We are just waiting for Jim Cramer to tell us it is a “strong bank” before we call this one as finished. https://t.co/Nkme5yNBCx pic.twitter.com/5VFU02WLwf— Wall Street Silver (@WallStreetSilv) May 3, 2023
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The post PacWest Bancorp Suffers Major Blow As Stock Prices for US Regional Banks Take a Dive appeared first on DeFi Planet.