Customers Pull Cash But Faith Remains in The New York Community Bank
The New York Community Bank (NYCB) saw $6 billion pulled from its deposit base between February 5th and March 5th, leaving its coffers 7% lighter at $77 billion. However, executives at the Long Island-based regional bank say the outflow does not indicate a wider bank run.
While the withdrawal is sizable, it pales in comparison to the $42 billion drained from Silicon Valley Bank in a single day before its collapse years ago. New York Community Bank CEO Alessandro DiNello, who was appointed just last week. Said deposits had remained steady until a Wall Street Journal article ran suggesting the bank was seeking fresh capital.
Mnuchin’s Timely Investment Boosts Confidence
That confidence was restored upon the announcement of a $1 billion investment led by former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital and other private equity firms. NYCB shares jumped 13% on the news after seesawing wildly the prior day. DiNello said deposits rebounded to normal levels after the cash injection was made public.
The timely deal shows there remains faith in the New York Community Bank to navigate its current challenges, analysts said. While more reserves may be required, the regional lender. Based in Long Island for over 150 years. Aims to prove skeptics wrong and stabilize its position with support from seasoned financial backers.
