- ORIGINAL NEWS
NYCB says it lost 7% of deposits in the past month, slashes dividend to 1 cent
- SUMMARY
New York Community Bank (NYCB) has been facing challenges recently.
In just a few weeks, the bank lost 7% of its deposits, dropping from $83 billion to $77.2 billion.
Credit agencies downgraded the bank’s rating, causing concern among investors.
In response, NYCB announced a significant capital injection of over $1 billion from investors led by former Treasury Secretary Steven Mnuchin.
They also slashed their quarterly dividend by 80%.
The hope is that this will help stabilize the bank and give them time to address concerns about its loan portfolio and risk management practices.
The capital raise has raised hopes that NYCB has enough time to resolve its issues, particularly its exposure to New York-area multifamily apartment loans.
Mnuchin, who led the investment, believes that the bank can become a strong regional commercial bank.
However, analysts believe that NYCB may have to sell assets and take write-downs to strengthen its financial position.
They will also need to reduce their concentration in commercial real estate loans and consider reducing their assets below $100 billion, which triggers increased regulatory scrutiny.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“The capital injection announced Wednesday has raised hopes that the bank now has enough time to resolve lingering questions about its exposure to New York-area multifamily apartment loans.”
“Mnuchin told CNBC in an interview Thursday that he started looking at NYCB “a long time ago”.”
Negative
“New York Community Bank said Thursday it lost 7% of its deposits in the turbulent month before announcing a $1 billion-plus capital injection from investors led by former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital.”
“NYCB also said it’s slashing its quarterly dividend for the second time this year, to 1 cent per share from 5 cents, an 80% drop.”