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NYCB shares rise as $5 bln loan sale to JPMorgan bolsters liquidity
By Jerry
May 15 (Reuters) – New York Community Bancorp’s (NYCB.N), opens new tab shares rose about 3% before the bell on Wednesday after the lender agreed to sell a portfolio of about $5 billion in mortgage warehouse loans to JPMorgan Chase (JPM.N), opens new tab.
The deal on Tuesday with the largest U.S. bank by assets will bolster NYCB’s liquidity as the new management team targets a return to profitability next year.
“The loan sale… is an important first step for management to restore credibility as the team looks to improve profitability,” analysts at Jefferies wrote in a note.
The turmoil in the last few months, sparked by a surprise quarterly loss in January, has wiped billions off the NYCB’s value, led to a mass exodus of bankers and shrank its total deposits.
The new management, led by former Comptroller of the Currency Joseph Otting, has pledged to shrink the lender’s non-core assets and retreat from commercial real estate (CRE) lending, which has been battered by fears of default amid higher interest rates and low occupancy.
Source: REUTER
