A fresh cash infusion from the sale of loans by hard-hit bank stock PacWest Bancorp lifted the financial sector on Monday.
PacWest Bancorp
PACW,
led gains among bank stocks with a rise of 7% as it said it had generated about $2 billion in cash after Ares Management Corp.
ARES,
closed its acquisition of a loan portfolio.
Truist analyst Brandon King said the deal is a positive sign for bank stocks overall.
“We think other banks facing liquidity and capital issues may be more inclined to pursue loan sales given the appetite from non-bank lenders at non-haircuts,” King said in a research note.
PacWest stock is up 4.4%, while the KBW Nasdaq Bank Index
BKX,
is ahead by 0.6%, the SPDR S&P Bank exchange-traded fund
KBE,
is up by 1.2%, the Financial Select SPDR ETF
XLF,
is down 0.2% as some larger bank stocks moved down, and the SPDR S&P Regional Banking ETF
KRE,
is up by 1.5%.
Among other bank names, Comerica Inc.
CMA,
is up 1.6%, East West Bancorp. Inc.
EWBC,
and First Horizon Corp.
FHN,
are both up 1.8% and Zions Bancorp
ZION,
is up 1.7%.
Metropolitan Bank Holding Corp.
MCB,
is up by 4.4%, Prosperity Bancshares Inc.
PB,
is up by 1.5%, Citizens Financial Group Inc.
CFG,
is ahead by 0.8% and Western Alliance Bancorp.
WAL,
is up by 3.5%.
Most of the gains in banking were in regional banks, as the megabank stocks were mixed. Goldman Sachs Group Inc.
GS,
and Wells Fargo & Co.
WFC,
both dropped about 0.2%, while Bank of America Corp.
BAC,
rose 0.9% and JPMorgan Chase & Co.
JPM,
retreated by 0.7%.
While many regional-bank stocks are getting a lift, Wall Street is also waiting to see the results of the Federal Reserve’s bank stress tests on Wednesday.
Also read: Fed official eyes ‘reverse stress tests’ for banks as results awaited after 2023 bank failures
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