- ORIGINAL NEWS
NYCB shares whipsaw after bank picks new chairman, Moody’s downgrades bank’s credit to junk
- SUMMARY
New York Community Bank’s recent struggles have prompted the company to promote its chairman, Alessandro DiNello, to executive chairman in an effort to stabilize its operations.
This decision comes after Moody’s Investors Service downgraded the bank’s credit ratings to junk status, causing a significant drop in the bank’s market value.
NYCB has been experiencing a series of challenges, including a surprise fourth-quarter loss, mounting losses on commercial real estate, and the need to slash its dividend to conserve capital.
The bank’s troubles have raised concerns about the management’s ability to handle the complexities of its recent acquisitions and heightened regulatory scrutiny following its expansion.
The appointment of DiNello, who previously served as CEO of Flagstar Bank before its acquisition by NYCB, is intended to improve the bank’s operations and address governance issues.
The bank is also seeking replacements for its chief risk officer and chief audit executive, which have been vacant since before the disastrous earnings report.
In an attempt to restore confidence, NYCB has released unaudited financial information showing a strong deposit base and ample liquidity.
The bank has stated that it has not seen any significant deposit outflow from retail branches, indicating that customers have maintained trust, despite the bank’s difficulties.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“NYCB made Alessandro DiNello executive chairman effective immediately, promoting him from nonexecutive chairman, to work with CEO Thomas Cangemi “to improve all aspects of the Bank’s operations,” according to a statement”
“Shares dropped as much as 13% Wednesday morning but recovered up 6% at market close.”
Negative
“Late Tuesday Moody’s Investors Service downgraded NYCB’s credit ratings two notches to junk.”
“The regional bank has been in free fall, shedding almost 60% of its market value across a punishing series of trading sessions, since reporting a surprise fourth-quarter loss last week.”