The four largest U.S. banks lost $52 billion in market value on Thursday after shares of SVB Financial, a major lender to the tech industry, plunged 60 percent. SVB Financial spooked the markets by announcing a stock offering and the sale of securities to raise cash as it struggles with falling deposits. The bank later disclosed a $1.8 billion loss from those sales, raising concerns that other banks could face similar problems. Chief executive Greg Becker tried to reassure customers, urging them not to withdraw deposits or spread fear, the Wall Street Journal reported from sources familiar with the matter.
In Europe, Deutsche Bank was among the biggest losers on Friday, with its shares falling almost 10 percent after Frankfurt’s market opened, later recovering to trade about seven percent lower, AFP reported. In London, Barclays, Lloyds and NatWest each shed up to five percent before trimming some losses. France’s Société Générale fell more than five percent, while BNP Paribas dropped over three percent. In Switzerland, UBS and Credit Suisse each sank by more than four percent.
In Asia, Tokyo‑listed Mitsubishi UFJ Financial Group fell more than six percent. HSBC lost around three percent in Hong Kong, and National Australia Bank saw a similar decline in Sydney.
Central banks worldwide have been raising interest rates to tame decades‑high inflation. Higher rates have reduced the value of lower‑yielding bonds that banks held before the rate‑hike campaigns began last year. Consequently, banks face losses if they sell those assets to offset the drop in deposits. “In theory, rising interest rates would have been a boon for the banking sector, boosting net interest income as they start making money on deposits again,” said Swissquote analyst Ipek Ozkardeskaya. “But the problem is that the interest rates rose too fast.”
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