Shares of California-based PacWest Bancorp tumbled 56% after news of a possible sale came in. In this respect informs CNBC.
The publication noted that investors were alarmed by these reports as they feared it could repeat the fate of PacWest’s two other California banks – Silicon Valley Bank (SVB) and First Republic Bank – which were shut down and whose assets were sold to larger financial institutions.
Compared to previously failed banks with over $200 billion in assets, PacWest is worth significantly less at $40 billion and has 67 branches. At the same time, after the collapse of SVB and First Republic Bank, small regional banks may suffer the consequences.
Shares of American First Republic Bank at the end of April collapsed Against the background of the release of financial statements showing a large outflow of deposits, it is currently up more than 22%.
Prior to that, Seth Carpenter, a leading economist at financial conglomerate Morgan Stanley, said that the collapse of the major investment bank SVB would not lead to a full-blown recession in the US in the near future. Even before the turmoil in the domestic banking sector, lending growth in the US market slowed.