New York Community Bancorp’s stock resumed its slide on Tuesday after a weekend comment by Federal Reserve Chairman Jerome Powell about challenges posed by regional banks.
New York Community Bancorp’s stock
NYCB,
dropped by 15.6% by midday. The stock is now down 56% in the past five sessions, after it disclosed an unexpected loss and problems with two loans, including an office loan.
The stock also weighed on the SPDR S&P Regional Banking ETF
KRE,
which fell by 0.7%.
When asked about a potential real-estate lending crisis, Jerome Powell told 60 Minutes television program on Sunday that “There’s some smaller banks and regional banks that have concentrated exposures in these areas that are challenged.”
Powell predicted that there will be “expected losses” among regional banks but that overall, the banking system will remain sound, according to a transcript posted by CBS.
“It feels like a problem we’ll be working on for years,” Powell said. “It’s a sizable problem. I don’t think — it doesn’t appear to have the makings of the kind of crisis things that we’ve seen sometimes in the past, for example, with the global financial crisis.”
Meanwhile on Tuesday, the Financial Times reported that New York Community Bancorp’s chief risk officer Nicholas Munson left the bank earlier this year.
Citing his LinkedIn page, which has since been deleted, and people familiar with the bank, The Financial Times reported that Munson had left, and a bank spokesperson confirmed the information.
A bank spokesperson did not return a voice mail from MarketWatch inquiring about the chief risk officer.
Also read: Does New York Community Bancorp have another surprise in store for investors?
Also read: Banks’ office-loan exposure remains a ‘mixed bag’ as lenders manage through downturn
