A Pacific Western Bank branch in Huntington Beach, California. Reuters
A Pacific Western Bank branch in Huntington Beach, California. Reuters
A Pacific Western Bank branch in Huntington Beach, California. Reuters
A Pacific Western Bank branch in Huntington Beach, California. Reuters

PacWest says in talks with potential partners after stock plunges 60%


  • English
  • Arabic

PacWest Bancorp said core deposits have increased since March and confirmed it’s in talks with several potential investors, seeking to calm markets after a 60 per cent stock rout that made it the new focal point of concern over the health of US regional lenders.

“The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” PacWest said in a statement dated Wednesday. “Our cash and available liquidity remains solid and exceeded our uninsured deposits.”

The turmoil at PacWest shows how investor angst still remains elevated after a string of failures and deposit outflows in the sector despite Federal Reserve Chair Jerome Powell’s assurance Wednesday that authorities were closer to containing the crisis.

It’s reignited the debate over whether more US regional lenders will fall after this year’s collapse of SVB Financial Group’s Silicon Valley Bank, Silvergate Capital, Signature Bank and most recently First Republic Bank.

Smaller banks are under pressure after a year of interest-rate hikes hammered the value of their bond holdings and drove unrealised losses to an estimated $1.84 trillion.

Trouble in commercial real estate is adding to the pain, while depositors take their money out to seek better returns elsewhere. These stresses have put the spotlight on these lenders, which typically have fewer resources to defend themselves.

PacWest’s confirmation of a Wednesday Bloomberg News report that it’s exploring options, including a sale, helped the stock pare losses in after-hours trading, but the shares were still down 37 per cent as of 6am in New York Thursday.

“Recently, the company has been approached by several potential partners and investors - discussions are ongoing,” PacWest said. “The company will continue to evaluate all options to maximise shareholder value.”

Market watchers were sceptical PacWest’s comments would ease the concerns. Nervousness engulfed other bank stocks as well, dragging down an ETF tracking regional lenders to its lowest level since 2020.

Western Alliance Bancorp also said Wednesday that it had seen no unusual deposit outflows and reaffirmed its guidance deposits would rise quarter-over-quarter. Yet Western Alliance, Comerica Inc. and Zions Bancorp all fell more than 17 per cent this week through Wednesday’s close.

The sell-off in PacWest also flew in the face of Powell’s assertion that the government’s seizure and sale of First Republic Bank to JP Morgan Chase was “an important step toward drawing a line under that period of severe stress” for regional lenders, Mr Powell said.

Financial heavyweights including hedge fund billionaire Bill Ackman and former Federal Reserve Bank of Dallas President Robert Kaplan are among those warning of more banking stress to come.

Speaking before PacWest’s statement, Mr Ackman said he thought the whole US regional banking system is at risk.

“Confidence in a financial institution is built over decades and destroyed in days,” Mr Ackman, chief executive of Pershing Square, said on Twitter. “As each domino falls, the next weakest bank begins to wobble.”

Raise the Cap

Critics of the banking system have called for the Federal Deposit Insurance Corp. to increase the insurance cap, which typically covers a maximum of $250,000 on most accounts. While regulators are mulling a broadening of deposit insurance, no changes have yet been announced.

PacWest has been considering range of strategic options, including a sale, a break-up or a capital raise, according to people familiar with the matter, who asked to not be identified discussing private information.

While it is open to a sale, the company hasn’t started a formal auction process, the people said. The bank has about $44 billion in assets, compared with more than $200 billion for SVB.

An outright sale has been hindered because there aren’t many potential buyers interested in the entire bank, which comprises a community lender called Pacific Western Bank and some commercial and consumer lending businesses, the people said.

A buyer would also have to potentially book a big loss marking down some of its loans, the people added.

After tumbling 60 per cent, PacWest pared losses in pre-market trading, but was still well below the $6.42 close on Wednesday.

PacWest’s statement “offers little in the way of confidence to the market,” said Tim Waterer, chief market analyst at KCM Trade. “Despite the best efforts by Jerome Powell to calm the market, there is nothing to suggest that the banking crisis is at an end.”

In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Cargoz%3Cbr%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%20January%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Premlal%20Pullisserry%20and%20Lijo%20Antony%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2030%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Griselda
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%C2%A0Andr%C3%A9s%20Baiz%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3ESof%C3%ADa%20Vergara%2C%20Alberto%20Guerra%2C%20Juliana%20Aiden%20Martinez%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
UK%20record%20temperature
%3Cp%3E38.7C%20(101.7F)%20set%20in%20Cambridge%20in%202019%3C%2Fp%3E%0A
Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

THE%C2%A0SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.4-litre%20four-cylinder%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20210hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20Starting%20from%20Dh89%2C900%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3C%2Fp%3E%0A
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20electric%20motors%20with%20102kW%20battery%20pack%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E570hp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20890Nm%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERange%3A%3C%2Fstrong%3E%20Up%20to%20428km%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C700%2C000%3C%2Fp%3E%0A
Updated: May 04, 2023, 11:17 AM`