BeInCrypto - The Financial Times reports that Western Alliance Bank is exploring a sale. Stocks tumbled following the news. But the bank vigorously denies that any sale is imminent, driving stocks back up.
A Financial Times article on Thursday stated that Western Alliance is considering various strategic options, including selling all or part of its business, as the bank seeks to weather the ongoing turmoil in the US banking sector. The bank has reportedly hired advisors to explore its options. However, people involved said the deliberations were still at an early stage. And, the story took a strange turn only hours later as the bank denied that it is mulling a sale.
US Banks on Edge
According to an updated version of the FT story, the bank told the London-based paper that such rumors are “categorically false in all respects.” The FT went on to quote a bank spokesperson stating, “Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic options.”
But the initial news sent bank stocks tumbling. It is a sign that investors remain highly wary of the precarious state of the financial and banking sectors. Shares of the bank dropped over 46%, according to CNBC, before rebounding.
Denials aside, the malaise is widespread. The same day, trading of shares in California-based lender PacWest Bancorp was halted. The pause was due to a sudden 42% decline in PacWest stock.
PacWest has reportedly been in talks with potential investors after shares fell by as much as 60%. Reports have emerged that the bank is looking at strategic options. Including a sale or a fundraising round.
The lender tried to reassure investors and customers in a May 4 update published on its website. Attempting to convince them that the news that has shaken the banking world in recent weeks and months has left PacWest largely untouched.
“The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” its statement read. It cited an increase in core customer deposits since March 31, to a present total of $28 billion.
But the US banking sector has been on edge since the collapse of three banks in March. The toppling of Silvergate, Signature Bank, and Silicon Valley Bank represented the biggest banking crisis since 2008. Time will tell where it ends and what banks are left standing.
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