The Los Angeles-based bank declared a quarterly dividend of $0.01 per share and said business “remains strong.” Its shares rise almost 100% in two days.
PacWest Bank shares rose 3.7% on Monday after the company slashed its dividend and said the business “remains fundamentally sound.” During the day, the bank papers climbed more than 20%.
The Los Angeles-based bank stated a quarterly dividend of $0.01 per common sharedown from its previous dividend of $0.25 per common share—a 96% decrease.
As reported by the Investing.com website, Paul Taylor, the bank’s president and chief executive officer, commented: “Given the current economic uncertainty, recent volatility in the banking sector and possible changes in regulatory capital requirements, we believe that the dividend reduction is a prudent step to accelerate our plans to raise capital up to a CET1 of more than 10%”.
And he assured that the company’s business remains fundamentally sound, so they will continue with the strategy of focusing on their relationship-based community banking model.
This Monday’s rise followed Friday’s, when the stock climbed 82%. Even so, at the closing price on Friday, the shares accumulated losses of 75% so far this year.
The news also benefited other regional banks such as Western Alliance Bancorporation (+7.8%) and Zions Bancorporation (+3.8%).
This comes after the entire regional banking sector was affected by fears of contagion from a banking crisis following the collapse of Silicon Valley Bank (SVB), Signature Bank and First Republic Bank earlier this year.
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