tl;dr
New York Community Bank has announced a $1 billion capital injection led by Steven Mnuchin’s Liberty Strategic Capital in an effort to stabilize the bank, which recently revealed a $2.4 billion loss. The struggling bank, facing exposure to the commercial real estate market and the weight of acquisit...
New York Community Bank has announced a $1 billion capital injection led by Steven Mnuchin’s Liberty Strategic Capital in an effort to stabilize the bank, which recently revealed a $2.4 billion loss. The struggling bank, facing exposure to the commercial real estate market and the weight of acquisitions, has replaced its CEO with former Comptroller of the Currency, Joseph Otting. Despite a significant drop in stock prices, the announcement of the capital injection triggered a 96% surge in NYCB’s stock.
An ailing New York bank has just announced an injection of $1 billion in capital in a push to stay afloat. New York Community Bank says the infusion was led by former U.S. Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital, as well as Hudson Bay and Reverence Capital. In a press release, Mnuchin says he believes the investment will stabilize the $113.9 billion bank, which revealed a loss of $2.4 billion to the public last week.
NYCB is struggling with its exposure to the commercial real estate market amid sustained rate hikes from the Fed. It’s also feeling the weight of several acquisitions including a big portion of Signature Bank, which collapsed last year. The bank fired and replaced its CEO last week – and has done this once again today. The new, new CEO will be former Comptroller of the Currency, Joseph Otting.
NYCB’s stock has cratered this year, dropping about 50% in January and February, then 25% last week, 26% on Monday and as much as 47% today, when trading was frozen pending the liquidity announcement. That announcement and subsequent unfreezing of the stock triggered an immediate surge from $1.76 to $3.46, representing a 96% jump. The stock remains well below its January 1st, 2024 price of $10.41.
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