PacWest, Western Alliance lead rebound in US regional lenders
2023.05.18 08:05
© Reuters. FILE PHOTO: A general view of Pacific Western Bank in Huntington Beach, California, U.S., March 22, 2023. REUTERS/Mike Blake/
(Reuters) – Battered shares of PacWest Bancorp and Western Alliance (NYSE:) Bancorp edged higher in premarket trading on Thursday as the U.S. midsize lenders looked to sustain a recent rebound booked on bets that the worst of the regional banking turmoil was over.
PacWest Bancorp, which is currently exploring strategic options, climbed 7.9% and was set to build on a 22% gain recorded for the week till Wednesday.
Shares of Western Alliance climbed 4.2%, also poised to extend their near 27% surge this week after the Phoenix-based lender reported strong deposit growth in an attempt to reassure investors of its financial health after three regional banks failed in recent months.
After a bruising selloff, U.S. regional banks have found some reprieve this week thanks to favorable brokerage actions following Western Alliance’s deposit disclosure, along with hopes that Washington will reach a deal to raise the U.S. debt ceiling.
Fund managers and billionaire investors have also doubled down on mid-sized lenders, hoping to buy the dip.
The KBW Regional Banking Index jumped 7.2% on Wednesday, recording its biggest percentage gain in nearly two years. The index has risen nearly 11% from a 2-1/2-year low hit earlier this month.
Among other movers on Thursday, Zion Bancorp climbed 1.3% and First Horizon (NYSE:) added 2.4%.
Meanwhile, Charles Schwab (NYSE:) Corp edged about 1% lower after the financial services firm said it was looking to raise $2.5 billion in debt.
