Bank financial reports released last week showed that the worst outflow of capital from regional banks was stopped, aided by the government's quick and special response to provide hidden support for all uninvested savings.
At a time when markets were optimistic that the March banking crisis was far away, Nick Timiraos, known as the “microphone of the Federal Reserve,” said:The banking chaos may not be over yet.
At the same time, analysts also warned that the market needs to prepare for the impact of a sharp decline in bank profits. Analysts' predictions$Spdr S&P Bank Etf (KBE.US)$The Q1 profits of the 10 constituent stocks will fall by at least 30%, including those in the midst of a banking crisis$First Republic Bank (FRC.US)$. The details are as follows:
Furthermore,Moody's downgraded 11 regional banks in the US last Friday.It suggests that rising interest rates and the recent collapse of several banks have led to increased instability. The banks that have been downgraded include:
Those with assets of about 682 billion US dollars$U.S. Bancorp (USB.US)$and assets of 89 billion US dollars$Zions Bancorp (ZION.US)$; It is on the list of those most affected by the turmoil in the regional banking industry$Western Alliance Bancorp (WAL.US)$The rating was downgraded by two levels; the one that faced crowding last month$First Republic Bank (FRC.US)$The preferred stock rating was downgraded.
According to Moody's,Regional banks are relatively exposed to commercial real estate, which has been severely hit.Banks in the US hold about half of outstanding commercial real estate debt, and some banks focus their business heavily on construction, office, or land development.
However, “old debt tycoon” Bill Gross (Bill Gross) strongly supported regional bank stocks. He revealed that he bought, among others$Western Alliance Bancorp (WAL.US)$,$Synovus Financial (SNV.US)$,$PacWest Bancorp (PACW.US)$, and$Spdr Series Trust S&P Regional Bkg Etf (KRE.US)$Regional bank stocks included. Gross said,
Earlier in March, the collapse of Silicon Valley banks triggered a banking crisis in Europe and the US. The stock prices of small US banks plummeted, and the stock price was about 60% off their net assets. This has brought its return on equity to around 10%, which is an attractive long-term investment. Also, smaller regional banks may be “taken over” by larger banks at a price higher than current prices.
Cow friends,
Is the banking crisis coming to an end?
Are there any profit opportunities for regional banks?
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Editor/Somer