Stock Market News

NYCB shares struggle to gain after selloff over CRE exposure worries

2024.02.09 10:13


© Reuters. A dealer works on the submit the place New York Community Bancorp inventory is traded on the ground on the New York Stock Exchange (NYSE) in New York City, U.S., February 7, 2024. REUTERS/Brendan McDermid

(Reuters) – New York Community Bancorp (NYSE:) shares swayed between positive factors and losses in early buying and selling on Friday, reeling beneath credit-rating cuts over its exposure to the troubled business actual property (CRE) sector within the United States.

The lender’s shares have misplaced practically 60% of their worth since Jan. 31 when it posted a shock quarterly loss and slashed its dividend. It was final down 0.7%.

The selloff sparked worries of a world contagion as buyers feared potential defaults of CRE loans would harm the stability sheets of a number of regional banks, whilst NYCB promised steps to bolster its monetary energy.

The KBW Regional Banking Index, a key index to gauge investor sentiment towards the business, has fallen 11.7% to this point this 12 months.

NYCB’s newly appointed government chairman Alessandro DiNello mentioned on Wednesday the financial institution will take into account the sale of loans in its CRE portfolio or allow them to run off the stability sheet naturally.

If wanted, it will additionally shrink its stability sheet by promoting non-core belongings, he mentioned.

Morningstar DBRS on Thursday downgraded NYCB’s credit standing due to “outsized” exposure to CRE. Rating companies Fitch and Moody’s (NYSE:) had already reduce their scores on the financial institution.

“The company is also facing challenges of meeting the higher regulatory bar that comes with being a Schedule IV bank (over $100 billion in assets), while at the same time fully integrating the Flagstar Bancorp (NYSE:) merger,” Morningstar mentioned.

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