PacWest claims US$15 billion of immediately available liquidity

PACWEST Bancorp has US$15 billion of immediately available liquidity and enough resources to fund its cash flow needs over the next 12 months, it said on Thursday (May 11), but shares were down 7 per cent in pre-market trade as investor worries persist.

Worries about the stability of mid-sized banks have deepened in recent days, with investors punishing stocks even of seemingly healthy lenders despite reassurances from regulators the banking sector is financially sound.

So far this month, PacWest shares have lost nearly 40 per cent. The bank’s shares plunged to a record low last week after it said it was exploring strategic asset sales.

During the week ended May 5, deposits declined about 9.5 per cent, the bank said, adding the majority of those outflows happened on May 4 and May 5, after news reports said PacWest was exploring options.

But at the end of the first quarter, PacWest had US$341.7 million in cash and cash equivalents, which it said would be sufficient to fund cash flow needs over the next 12 months.

Wall Street executives and bank analysts have urged regulators to provide greater protection for bank deposits and consider other backstops, arguing only a strong intervention could put an end to the crisis. REUTERS