NYCB - Commercial Real Estate Woes Trigger Shockwaves In Regional Banking Stocks | Benzinga
The commercial real estate sector’s current quandary has precipitated a significant drop in regional bank stocks, stirring investors’ memories of the notorious Silicon Valley Bank downfall.
What Happened: The KBW Nasdaq Regional Bank Index experienced its most severe drop since March, decreasing by 6%. This slump was primarily instigated by New York Community Bancorp, Inc. (NYSE:NYCB), which saw a nearly 40% drop following a Q4 loss of $260 million, consequent to distressed commercial real estate loans, according to a Business Insider report on Wednesday.
Losses in the U.S. property market also led to a 20% plunge in Agora Inc (NASDAQ:API) bank stocks based in Tokyo, while Deutsche Bank AG (NYSE:DB) amplified its provisions by four times to $123 million, bracing for future losses. New York Bancorp also set aside a sizable chunk of its $552 million provisions for its commercial real estate holdings.
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The troubles faced by these regional banks mirror the predicament of the US commercial property sector which has a looming $2.2 trillion debt due in 2027. A ...