US regional banks suffered more than US$95bn (£77.5bn) in market losses in the space of two weeks amid the collapse of major regional firms Silvergate Capital, Silicon Valley Bank and Signature Bank.
Data shared by Reuters shows that First Republic Bank suffered the biggest hit of banks listed in the S&P 500 regional bank index. San Francisco-based First Republic fell even further on Monday, plummeting 47% after copping a significant downgrade from B+ to BB- by the S&P ratings agency.
So far this month, First Republic has nosedived over 90% to US$12.18, although shares look set to rebound up to 16% when US trading opens on Tuesday.
Arizona-based Western Alliance Bancorporation has also bore the brunt of the regional banking rout, falling 60% to US$29.21 since the start of March, while North Carolina’s Truist Financial Corp has dipped over 33% since the start of March.
Regional banks have been hit the hardest in the turmoil, as spooked customers rushed to withdraw large quantities of deposits due to fears that smaller, more volatile financial institutions would be unable to honour redemptions.
Conversely, behemoths such as JP Morgan Chase & Co and Citibank Inc have seen significant deposit inflows.
Speaking of ratings cuts, S&P Global Ratings cut its outlook on UBS Group from stable to negative after the Swiss bank announced its multibillion-dollar takeover of Credit Suisse.
S&P said it saw “material execution risk in integrating Credit Suisse into UBS given the size and weaker credit profile of Credit Suisse and particularly the complexity in winding down a large part of Credit Suisse’s investment banking operations”.