Bank stocks jumped to an uneven rebound on Tuesday, continuing to swing wildly as regulators work to prop up the financial sector. First Republic Bank (FRC) is leading the morning action after stocks nearly halved on Monday. overseas, Deutsche Bank (DB) climbed after UPS (UPSA transaction to buy Credit Suisse. Here are the fastest moving banking stocks heading into trading on Tuesday.
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Yellen speaking at the ABA Summit
Meanwhile, Treasury Secretary Janet Yellen issued prepared remarks for the Washington Summit of the Association of American Bankers on Tuesday, saying the government was ready to provide additional deposit guarantees should the banking situation worsen.
“The steps we have taken are not focused on helping specific banks or categories of banks,” the statement said. “Our intervention was necessary to protect the broader US banking system. Similar actions could be warranted if smaller institutions experience deposit inflows that pose a contagion risk.”
Yellen will address the ABA at the rally in Washington, D.C. at 10 a.m. ET.
Bank stocks are poised to go up
First Republic Bank stock rose 25% early Tuesday, after the Wall Street Journal reported Monday that JPMorgan (JPM) CEO Jamie Dimon is leading discussions of a new bailout plan. First Republic received a $30 billion deposit from America’s 11 largest banks on Friday. Dimon and other CEOs are considering turning some or all of the $30 billion in deposits into a capital injection. A sale or an injection of external capital is also being considered. On March 12, First Republic secured $70 billion in additional liquidity from JPMorgan and the Federal Reserve.
Backwest Bancorp (PACW) is on track for its second day of gains, rising 12.5% pre-market on Tuesday after a jump of 11% on Monday. The Los Angeles-based bank provided a liquidity update on Friday, reporting that it “remains strong in liquidity” with more than $10.8 billion in available cash.
UBS Group stock jumped 7% on Tuesday and rose on Monday after the Credit Suisse acquisition. Swiss regulators on Sunday brokered a deal to buy Swiss banking giant UBS for 3 billion Swiss francs, the equivalent of $3.24 billion. The combined organization will have more than $5 trillion in invested assets globally.
The Swiss National Bank provided a $108 billion liquidity assistance loan to UBS to facilitate the deal. The government pledged $9.7 billion to support the losses as part of the takeover. Meanwhile, Germany Deutsche Bank (DBrose 6.4% on Tuesday morning as European banks breathed a sigh of relief.
New York Community Bank (NYCB) rose 5.6% on Tuesday morning and rose 6.5% before the opening bell. NYCB stock rose nearly 32% Monday after the FDIC announced a deal to sell all of Signature Bank’s deposits to New York Community Bank Flagstar Bank on Sunday.
Regional Rise
Phoenix based Western alliance (WAL) rose with regional banks early Tuesday morning, up 9.4% to recoup their losses from Monday.
US Bancorp (USBThe stock rose 4.9% Tuesday morning after the rating improved. On Monday, Baird upgraded its US Bancorp rating to outperform from neutral with a 52 price target. Analyst David George described US Bancorp as “a quality regional bank with little to no downsides and (about) an upside.” 50% over time.”
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