Western Alliance shares retreated from session lows after the Arizona-based bank denied it was exploring a potential sale.
The Arizona bank described a Financial Times report that it was considering a potential sale of all or part of its business as “categorically false in all respects,” adding, “Western Alliance is not exploring a sale, nor has it assumed a consultant exploring strategic options”.
Two people briefed on the internal discussions told the FT that the bank, which has a market cap of $2 billion, was exploring strategic options including a potential sale of all or part of its business.
The Arizona-based bank, which has assets of $65 billion, fell as much as 45% after the FT report, before recovering and falling 39%. On Thursday, PacWest, another bank that made investors nervous, said yes exploring his options.
Shares of US regional banks They came under intense selling pressure this week after JPMorgan Chase’s regulator-brokered takeover of First Republic failed to restore confidence in the industry.
In a Wednesday news conference, US Federal Reserve Chairman Jay Powell sought to allay worries about the banking turmoil, saying conditions across the industry had “vastly improved” since the period of “severe stress” at the start of March and that the system as a whole was “sound”.
US officials are watching deposit flows more closely than stock prices, which Powell said Wednesday had stabilized, as they are a better indicator of a bank’s health.
“The resolution and sale of First Republic is an important step in drawing the line during that time of severe stress,” he said before PacWest announced plans to explore a potential sale.
Western Alliance said Wednesday that total deposits rose to $48.8 billion from $47.6 billion at the end of March. It said it had “not experienced any unusual deposit flows following the sale of First Republic”. He said 74% of the deposits were covered by guarantees from the Federal Deposit Insurance Corporation.
Western Alliance for much of the past two decades was run by Robert Sarver, the former owner of the Phoenix Suns NBA basketball franchise.
Earlier this year, Sarver was forced to sell alone after an investigation found evidence that under her leadership the team had created a hostile environment for both blacks and women. Sarver was fined $10 million and suspended by the NBA and WNBA for one year.
Sarver, who had held a senior role at Western Alliance since 2003, stepped down as bank president last year when the NBA controversy erupted.
—————————————————-
Source link