The collapse of three U.S. lenders in two months has sent shockwaves throughout the sector
Shares of beleaguered PacWest Bancorp have jumped, leading a broader recovery in the battered U.S. banking sector.
PacWest’s stock boost comes after the bank on Friday said it would sharply cut its quarterly dividend to shore up its finances.
The Los Angeles-based lender will now pay one cent per common share, compared with its regular dividend payout of 25 cents, citing economic uncertainty and volatility in the industry.
Shares of PacWest were hammered to a record low last week after the bank said it was exploring strategic options, including a potential sale or capital raise.
The collapse of three U.S. lenders in two months has sent shockwaves throughout the sector, with investors dumping shares of even those banks that analysts say are financially sound.
The KBW Regional Banking index recovered some losses on Friday, but it is still down more than 26% since the beginning of the regional banking crisis in March.
PacWest shares were up as much as 24% on Monday before pairing some of those gains. Peers Western Alliance Bancorp, Comerica and Zions Bancorp also rose.
