Regional Banks Rally After PacWest Slashes Dividend
Regional banks have seen a surge in stock prices after PacWest Bancorp announced a drastic reduction in its dividend. The move has been seen as a sign of the company’s commitment to preserving capital and weathering the economic downturn caused by the coronavirus pandemic.
PacWest Bancorp’s Dividend Cut
PacWest Bancorp, a Los Angeles-based bank, announced on May 8th that it would be slashing its dividend from $0.25 per share to $0.01 per share. The move was seen as a way for the bank to conserve capital and prepare for the potential economic downturn caused by the coronavirus pandemic.
The dividend cut was met with a surge in PacWest Bancorp’s stock price, which rose by as much as 10.5% in the days following the announcement. The stock has since settled at around 8.5% higher than it was before the announcement.
Regional Banks Follow PacWest’s Lead
The dividend cut by PacWest Bancorp has had a ripple effect on other regional banks. In the days following the announcement, several other regional banks saw their stock prices rise.
For example, Zions Bancorp saw its stock price rise by as much as 8.2%, while First Horizon National Corp saw its stock price rise by as much as 7.3%. Other regional banks, such as Comerica Inc. and M&T Bank Corp., also saw their stock prices rise in the days following the announcement.
Analysts React to the News
Analysts have reacted positively to the news of PacWest Bancorp’s dividend cut. Many have praised the move as a sign of the bank’s commitment to preserving capital and preparing for the potential economic downturn caused by the coronavirus pandemic.
Analysts have also noted that the dividend cut could be a sign of things to come for other regional banks. Many have speculated that other regional banks may follow PacWest Bancorp’s lead and reduce their dividends in order to conserve capital and prepare for the potential economic downturn.
Regional Banks Brace for Economic Downturn
The dividend cut by PacWest Bancorp is a sign of the times for regional banks. As the coronavirus pandemic continues to wreak havoc on the global economy, regional banks are taking steps to conserve capital and prepare for the potential economic downturn.
The dividend cut by PacWest Bancorp is just one of the many steps that regional banks are taking to prepare for the potential economic downturn. Other regional banks are also taking steps to conserve capital, such as reducing staff, cutting back on expenses, and increasing loan loss reserves.
Conclusion
The dividend cut by PacWest Bancorp has had a ripple effect on other regional banks. The move has been seen as a sign of the bank’s commitment to preserving capital and preparing for the potential economic downturn caused by the coronavirus pandemic. Other regional banks have followed PacWest Bancorp’s lead and are taking steps to conserve capital and prepare for the potential economic downturn.