US Bank Oil Fund rose – stock almost halved – E24

The bank that rescued failed Signature Bank fell sharply on Wall Street. The oil fund owned more than one percent at the end of last year.

Market capitalization of the regional bank New York Community BancorpNew York Community BancorpRegional banks own New York Community Bank and Flagstar Bank (NYCB) has almost halved in recent days.

Recently published figures showed that the oil fund owned 1.05 percent of the bank at the end of last year. The value of the ownership stake at that time was approximately NOK 788 million.

Now, on paper, the value of the bank's oil fund may have fallen by several hundred million kroner, if ownership had not changed since New Year's Eve.

The Fund may have bought or sold shares during the period.

The Norwegian Oil Fund has no comments on this matter.

Last year, the fund increased its ownership in the bank from 0.84 percent at the end of 2022.

The development in individual stocks has nothing to do with the value of the fund of more than NOK 16,000 billion, which constantly sets new records and is invested widely to minimize the risk of losing money.

However, the price collapse is a reminder of the bank's collapse last year, which sparked strong reactions from the fund.

So the stock goes down

The New York Mercantile Bank reported major losses related to commercial real estate on Wednesday, shocking investors.

The stock price fell by a record 38 percent on Wednesday this week, according to him The New York Times to the lowest level in 25 years

On Thursday, the decline continued, with the stock falling 11 percent.

On Friday, shares rebounded somewhat and rose about 5 percent.

New York Commercial Bank incurred losses of $185 million on just two loans and set aside more than $500 million to cover potential loan losses. These amounts correspond to NOK 1.9 and 5.2 billion respectively.

Since the loss notice, there has been a broader decline in rates for US regional banks.

The US commercial real estate market is facing a double problem, as interest costs are rising at the same time as fewer people are working from offices after the pandemic.

We expect more pressure this year with the cessation of loan deferrals. Many borrowers will either have to inject fresh capital, allow banks to seize assets or sell in a weak market, says Kiran Raichura, real estate economist at analyst center Capital Economics. Financial Times.

Last year, New York Commercial Bank's stock price rose after the bank rescued failed Signature Bank.

– deviation

The oil fund felt the turmoil in the banking sector. The fund will lead a class action lawsuit against Silicon Valley Bank, which collapsed, causing the fund to lose billions of dollars.

CEO Bruce Van Saun, of US bank Citizens Financial Group, does not believe this is the beginning of a similar situation.

-It's all mostly in the rearview mirror now. Things started to feel more normal. The message from NYCB was a bit of a surprise. “I think it's an aberration,” Saun says Bloomberg.

On average, the oil fund owns 1.5% of all listed companies in the world.

This means that at the turn of the year the fund owned a smaller stake in New York Commercial Bank than the average fund held in companies in which it owns shares.