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PacWest, First Citizens, BankUnited shares lead rebound of regional bank stocks as UBS buys Credit Suisse

Published 2023-03-20, 03:37 p/m
Updated 2023-03-20, 03:45 p/m
© Reuters.  PacWest, First Citizens, BankUnited shares lead rebound of regional bank stocks as UBS buys Credit Suisse

© Reuters. PacWest, First Citizens, BankUnited shares lead rebound of regional bank stocks as UBS buys Credit Suisse

Proactive Investors - SPDR Regional Banking ETF (KRE) advanced as much as 2.1% on Monday, after dropping 14% last week, following the news of a Swiss government-engineered takeover of troubled lender Credit Suisse (SIX:CSGN) by UBS.

Leading the advance was PacWest Bancorp shares, which climbed 10% to $10.17, while shares of First Citizens BancShares Inc also jumped 10% to $559.30, and BankUnited (NYSE:BKU) Inc stock rose 7% to $22.74.

Other notable gainers included shares of Zions Bancorp NA, which moved up 1.6% to $30.41, as well as a nearly 2% increase in the price of KeyCorp (NYSE:NYSE:KEY) shares to $11.75.

First Republic Bank stock, however, continued to drop, down 45% to $12.58 after credit rating agency S&P tagged the bank with a significant downgrade over the weekend, dropping the regional bank from a B+ to a BB- rating (a three-step downgrade) and said that additional downgrades were not out of the question.

First Republic Bank shares have lost about 90% in value during the past 10 trading sessions.

On Sunday, UBS agreed to buy Credit Suisse for 3 billion Swiss francs, or US$3.2 billion.

Shortly thereafter, the US Federal Reserve announced a joint liquidity operation with a group of central banks — including the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank — in order to increase the frequency of their US dollar swap line arrangements from weekly to daily, as reported by CNBC.

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