Shares of banks and financial institutions are experiencing a slip in value as ongoing concerns about regional banks persist. The S&P Regional Banking exchange-traded fund has seen a recent selloff, resulting in an almost 8% decrease for the year to date. Among the hardest hit are Valley National and Columbia Banking System.
Implications of an Expiring Federal Reserve Program
The current sell-off in regional banks brings memories of last spring, according to J.D. Joyce, president of Houston financial advisory Joyce Wealth Management. One catalyst for this decline may be the imminent expiry of a Federal Reserve program that supports deposits, following the regional-banking crisis in early 2023.
Treasury Yields and Regional Banks
Regional banks are particularly susceptible to movements in Treasury yields due to their substantial holdings of Treasurys. Additionally, loan demand is sensitive to changes in these yields.
Italian Lender Shows Promise
Shares of an Italian lender saw a rally after revealing plans to enhance capital distributions to shareholders and upgrading its profit outlook for 2024.
French Bank Implements Cost Reduction Measures
Societe Generale, a French bank, is set to reduce costs by cutting approximately 900 jobs at its head office. This amounts to around 5% of the total head-office staff and forms part of their reorganization efforts.