Bank investors were spooked by SVB Financial Group's decision to sell a large chunk of its securities portfolio at a $1.8 billion loss as it deals with an outflow of deposits, which more than halved the technology-focused bank's stock.
The four biggest U.S. banks lost $52 billion of market value Thursday, part of a broad rout across financial stocks.
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JPMorgan lost about $22 billion in market value Thursday.
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Bank of America lost roughly $16 billion.
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Wells Fargo's market capitalization was down $10 billion.
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Citigroup's was down $4 billion.
The banking industry has more than $600 billion in unrealized losses on its securities holdings, according to the Federal Deposit Insurance Corp., the result of stowing extra cash in bonds when rates were super low. Now that rates have risen, the prices of the bonds have gone down significantly.
Truist Financial, Charles Schwab, JPMorgan and Capital One Financial each have more than $10 billion in unrealized losses on securities that they classify as available for sale, according to Performance Trust Capital Partners, which advises banks on balance sheet strategy.
Source: Wall Street Journal, OxBridge Research, Daily Stock Deals
The KBW Nasdaq Bank index marked its biggest decline in almost three years.
Editor, Daily Stock Deals
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