Bank stocks drop as FDIC flags challenges and strengths in quarterly report
The Federal Deposit Insurance Corp.'s quarterly banking profile report provided no lift to bank stocks, which fell sharply on Wednesday. FDIC Chairman Martin Gruenberg said banks "face significant downside risks from the effects of inflation, rising market interest rates, slower economic growth, and geopolitical uncertainty." The FDIC's first-quarter report included results in the banking sector up until March 31. The quarter ended only about three weeks into the regional banking turmoil that continued well into the second quarter after the FDIC took over Silicon Valley Bank on March 10. "These results...include the effects of only a few weeks of the industry's stress that began in early March, rather than over the course of the entire quarter," Gruenberg said. "The more lasting effects of the industry's response to that stress may not become fully apparent until second quarter results." Among bank stocks, PacWest Bancorp (PACW) dropped 5.3%, East West Bancorp Inc. (EWBC) dropped 4%, First Horizon Corp. (FHN) fell 5.3%, Citizens Financial Group Inc. (CFG) dropped 4.7%, Prosperity Bancshares Inc. (PB) is down 3.2%, KeyCorp (KEY) is down 5.6%, Metropolitan Bank Holding Corp. (MCB) is off by 6.6%, and Comerica Inc. (CMA) is down 5.9%. The KBW Bank Index is down by 3.2%, the Financial Select SPDR Fund (XLF) is down by 1.7% and the SPDR Regional Banking ETF (KRE) is down by 3.7%.
-Steve Gelsi
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May 31, 2023 11:08 ET (15:08 GMT)
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