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PacWest, Western Alliance lead rebound in US regional lenders

2023-05-18 19:52
Battered shares of PacWest Bancorp and Western Alliance Bancorp edged higher in premarket trading on Thursday as the
PacWest, Western Alliance lead rebound in US regional lenders

Battered shares of PacWest Bancorp and Western Alliance Bancorp edged higher in premarket trading on Thursday as the U.S. midsize lenders looked to sustain a recent rebound booked on bets that the worst of the regional banking turmoil was over.

PacWest Bancorp, which is currently exploring strategic options, climbed 7.9% and was set to build on a 22% gain recorded for the week till Wednesday.

Shares of Western Alliance climbed 4.2%, also poised to extend their near 27% surge this week after the Phoenix-based lender reported strong deposit growth in an attempt to reassure investors of its financial health after three regional banks failed in recent months.

After a bruising selloff, U.S. regional banks have found some reprieve this week thanks to favorable brokerage actions following Western Alliance's deposit disclosure, along with hopes that Washington will reach a deal to raise the U.S. debt ceiling.

Fund managers and billionaire investors have also doubled down on mid-sized lenders, hoping to buy the dip.

The KBW Regional Banking Index jumped 7.2% on Wednesday, recording its biggest percentage gain in nearly two years. The index has risen nearly 11% from a 2-1/2-year low hit earlier this month.

Among other movers on Thursday, Zion Bancorp climbed 1.3% and First Horizon added 2.4%.

Meanwhile, Charles Schwab Corp edged about 1% lower after the financial services firm said it was looking to raise $2.5 billion in debt.

(Reporting by Medha Singh and Mehnaz Yasmin in Bengaluru; Editing by Devika Syamnath)