(Reuters) – New York Community Bancorp shares were on track for a bounce back on Monday following a drubbing in the previous session after the lender replaced its CEO and flagged “material weaknesses” in internal controls related to a loan review.
The bank’s shares were last up 5% before the bell after slumping roughly 26% on Friday.
“Unfortunately, these additional news items place further scrutiny on the company at a time when it needs to restore confidence,” analysts at Morningstar DBRS said in a note.
“In our view, the return to the news cycle will once again test customer loyalty and deposit stickiness given this new round of stock price pressure following the fallout from a disappointing 4Q23,” the ratings agency said.
On Friday, the bank hired financial services veteran George Buchanan as its chief risk officer and said the “material weakness” in internal controls would not impact its financial results for 2023.
NYCB has been under pressure since it cut its dividend and posted a surprise fourth-quarter loss on Jan. 31, citing higher provisions tied to commercial real estate loans.
Late on Thursday, the lender revised its quarterly loss to $2.7 billion, citing a $2.4 billion goodwill impairment tied to transactions from 2007 and before.
Shares in the bank are down about 65% so far this year and the worries have also spilled over. The KBW Regional Banking Index – a key gauge of investor sentiment towards the sector – is down 11.1% over the same period.
Among other regional bank movers, shares in Zions Bancorporation fell 1.3% premarket after the S&P Dow Jones Indices said it would be removed from the benchmark S&P 500 later this month.
(Reporting by Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)
Comments