Bank Stocks Jump After Silicon Valley Bank Deal
Shares of U.S. regional banks surged Monday after the Federal Deposit Insurance Corp. said First Citizens is buying large pieces of Silicon Valley Bank, a milestone in efforts to stabilize the banking sector.
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Shares of U.S. regional banks surged Monday after the Federal Deposit Insurance Corp. said First Citizens is buying large pieces of Silicon Valley Bank, a milestone in efforts to stabilize the banking sector#FirstRepublicBank #SVBCollapse pic.twitter.com/veANrb8KCN
— The_Journalbiz (@the_journalbiz) March 27, 2023
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In recent market action:
First Citizens surged nearly 50%.
First Republic soared 18%; the San Francisco-based lender was among the worst-hit by fears about financial-sector instability, prompting 11 larger lenders to help shore it up.
Other regional banks advanced as well, with KeyCorp up 5%. PacWest was up 5% and Western Alliance was up 6%.
“With Silicon Valley Bank’s deposits and loans now housed in longer-term accommodation in the U.S., a calm of sorts has descended on the banking sector,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Shunting parts of the failed bank off to a new owner may give the regulator more capacity to deal with problems still threatening to pop up elsewhere.”
Bank stocks have been among the worst performers in recent weeks, as SVB’s collapse spread jitters about instability in the sector. As of Friday’s close, an S&P 500 sub-index of banks was down nearly 17% for the quarter.
