Regional banks 'not out of the woods' -ETF CEO
STORY: Shares of regional lenders did get a lift on Wednesday following the news that deposits at Western Alliance grew by more than $2 billion in the three months to May 12, suggesting customers remained confident on its financial health despite the failures of three other regional lenders in recent months: Silicon Valley Bank, Signature Bank, and First Republic Bank.
Western Alliance shares, which are down 40% year-to-date, surged 13% , erasing losses recorded over the last two weeks. Other regional lenders were also trading higher.
Regional banks, the largest lenders to the beleaguered U.S. commercial real estate and construction markets, have reduced their exposure to the sector by tightening standards and making fewer loans, according to a Reuters analysis.
Their tightening comes as many real estate borrowers face challenges making interest payments in a rising interest rate environment, while office use has declined and property values have decreased on recession concerns.