(News Bulletin 247) – The Californian bank PacWest saw its deposits melt by 20% between the end of December and March 20. However, it assures that its deposits stabilized last week and obtained $1.4 billion in cash injections from a fund.
The action of the California regional bank PacWest stalled on Wall Street after announcing that its deposits had melted by 20% and that it had ruled out the possibility of a capital increase in the short term.
The stock closed down 17% on Wednesday. If the action has not suffered as much as that of its competitor, First Republic, it has nevertheless posted a decline of nearly 60% since the beginning of the banking crisis.
The holding company, which oversees Pacific Western Bank, said in a statement on Wednesday that the bank had seen its deposit base decline by 20% since the end of December. This contraction was largely due to withdrawals from private equity firms, whose deposits fell 43%.
PacWest also disclosed that it secured a $1.4 billion cash injection from ATLAS SP Partners.
Abandoned capital increase
The latter was launched in February by the private equity giant Apollo Global Management, with the backbone of part of the securitization activities (creation of debt securities) of Credit Suisse, from which the bank had separated in November. In a delicate situation, Credit Suisse was officially bought by its rival UBS on Sunday.
PacWest also revealed to have studied the hypothesis of a capital increase, but to have given up immediately because of “the volatility of the markets and the depreciation of the prices of the shares of regional banks”.
Despite the reduction in the bank’s deposits since the end of 2022, chief executive Paul Taylor said he was “confident in the solidity of PacWest”, adding that he had observed “stability” in deposits and liquidity “over the past week”. .
At the end of 2022, PacWest was the 53rd largest bank in the United States by the size of assets, valued at $41 billion.
Based in Los Angeles, the establishment is mainly present in California, but also in North Carolina and Colorado.
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