U.S. regional bank shares look to recover from bruising selloff
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1970-01-01 08:00
Shares of major U.S. regional banks booked slim gains in premarket trading on Friday, a day after getting

Shares of major U.S. regional banks booked slim gains in premarket trading on Friday, a day after getting hammered by deposit declines at PacWest and a banking regulator's decision to impose a fee on uninsured deposits.

PacWest Bancorp recovered 5% after losing over a fifth of its market value on Thursday. The Los-Angeles-based lender had also disclosed posting $5.1 billion more in collateral to the U.S. Federal Reserve to boost its liquidity.

"More U.S. banks have been in the market crosshairs... despite many of the pressured banks having generally solid credit fundamentals," DBRS Morningstar analysts said.

"In our view, these fears are likely to persist until U.S. authorities revamp deposit insurance or place a temporary prohibition on short-selling."

Comerica Inc, Fifth Third Bancorp and KeyCorp also rose between 1.2% and 3%.

Beaten-down shares of Western Alliance Bancorp got some respite too, inching up nearly 3%. The bank's stock had dipped just 0.8% on Thursday, less than other industry peers, after it said total deposits jumped $600 million in the week to May 9.

The Federal Deposit Insurance Corporation (FDIC) said on Thursday it will charge lenders with a special assessment fee of 0.125% on uninsured deposits in excess of $5 billion.

But analysts suggested that the FDIC's fees were no cause for concern.

"While the special assessment is meaningful in terms of dollars overall to the industry, it is not as meaningful on a per-bank basis," Raymond James analysts wrote in a note.

(Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath)

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