Regional U.S. bank stocks sank on Wednesday, dragged by a 38% plunge in the shares of New York Community Bancorp (NYCB.N), opens new tab after it cut its dividend and posted a surprise loss, renewing fears over the health of similar lenders.
The KBW Regional Banking Index (.KRX), opens new tab closed down 6%, its biggest one-day drop since March 13 last year after New York’s Signature Bank collapsed amid depositor panic sparked by the failure days earlier of Silicon Valley Bank.
Deposits have since stabilized, but some investors said Wednesday’s sell-off highlighted ongoing concerns over regional lenders’ health, including that the cost of retaining deposits would squeeze net interest income (NII) which drives lending profits.
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