NYCB gains as stake purchase by top executives lifts investor trust
NEW YORK Community Bancorp shares surged on Monday (Feb 12), extending a rally from the previous session after top executives disclosing they had bought stock in the US lender.
The bank has been looking to boost investor confidence to stem a sell-off in its shares that began on Jan 31, when it posted a surprise quarterly loss due to its loans tied to the stressed commercial real estate (CRE) and slashed its dividend.
Purchases by NYCB executives totalled more than US$850,000 combined, regulatory filings published on Friday showed.
The stock was last up 9 per cent in early morning trading. It had closed up 17 per cent on Friday. Still, they are down 50 per cent so far this year and have weighed on the banking sector.
The KBW Regional Banking Index, a key index to gauge investor sentiment towards the sector, has lost 10 per cent in the same period.
Investors worry that weak demand for offices could trigger a wave of defaults in the US office property sector and hurt the balance sheets of banks, which are hoping to avoid selling CRE loans at significant discounts.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Brokerage Morgan Stanley said there will be a need to refinance about US$2 trillion of CRE debt – half of which is on bank balance sheets – expected to mature by the end of 2025.
“Our work indicates that the top 25 banks have about 30 per cent of this exposure and the rest of the 4,500+ smaller, regional banks have the remaining 70 per cent,” it said in an industry note.
Last week, banking veteran Alessandro DiNello, who was appointed NYCB’s executive chairman, said the bank will consider the sale of loans in its CRE portfolio or allow them to run off the balance sheet naturally. REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Visa adds new way to share customer shopping data with retailers
Stablecoin issuer Circle to make US legal home ahead of listing
Coinbase targets crypto demand in US$600 billion Australian pension sector
Citadel Securities revenue reaches US$2.3 billion in first quarter
Buffett’s Berkshire reveals US$6.7 billion stake in insurer Chubb
Deutsche Bank says prospects dimming for new share buyback