Worrying developments at New York Community Bancorp (NYCB) have several Bitcoin investors anticipating a renewed U.S. banking crisis – which could bring money crashing back into the digital currency.
The bank’s stock is down 41% over the past month, including a 28% plunge on Friday. Trading for $3.55 at writing time, it has now reached its lowest share price since 1996.
NYCB had already suffered major losses in early February after disclosing that CEO Thomas Cangemi had stepped down. Executive chairman Alessandro DiNello has effectively been the bank’s new boss since Feb 6.
In a letter on February 25, NYCB director Hanif “Wally” Dahya said he “did not support the proposed appointment” of DiNello as CEO. Dahya also resigned from the board.
The most recent development came late Thursday when the bank revealed that its previously disclosed $252 million fourth-quarter loss had been revised ten-fold up to $2.7 billion.
The extended loss was related to a $2.4 billion “goodwill” non-cash impairment charge related to transactions from several decades ago, which it said does not affect regulatory capital.
However, in a separate statement, the bank’s management said it had identified “material weaknesses in internal controls” resulting from “ineffective oversight, risk assessment and monitoring activities.”
On Friday, NYCB tried to calm investors with another announcement of a new chief risk officer and chief account executive to account for recent departures. Per a Bloomberg report, CEO DiNello added:
NYCB was responsible for acquiring Signature Bank, a crypto-supportive firm that was forced to close in March 2023 after suffering a wave of withdrawals that afflicted regional banks across the country.
Other major crypto banks, including Silvergate Bank and Silicon Valley Bank, were also forced to shut down at the time. When the U.S. government opted to bail out depositors to the latter, Bitcoin’s price shot up from $19,000 to $30,000 in the following days.
The post Got Bitcoin? Another US Bank Shows Signs of Weakness After Acquiring Signature appeared first on CryptoPotato.
The bank’s stock is down 41% over the past month, including a 28% plunge on Friday. Trading for $3.55 at writing time, it has now reached its lowest share price since 1996.
What’s Happening at NYCB?
NYCB had already suffered major losses in early February after disclosing that CEO Thomas Cangemi had stepped down. Executive chairman Alessandro DiNello has effectively been the bank’s new boss since Feb 6.
In a letter on February 25, NYCB director Hanif “Wally” Dahya said he “did not support the proposed appointment” of DiNello as CEO. Dahya also resigned from the board.
The most recent development came late Thursday when the bank revealed that its previously disclosed $252 million fourth-quarter loss had been revised ten-fold up to $2.7 billion.
The extended loss was related to a $2.4 billion “goodwill” non-cash impairment charge related to transactions from several decades ago, which it said does not affect regulatory capital.
However, in a separate statement, the bank’s management said it had identified “material weaknesses in internal controls” resulting from “ineffective oversight, risk assessment and monitoring activities.”
On Friday, NYCB tried to calm investors with another announcement of a new chief risk officer and chief account executive to account for recent departures. Per a Bloomberg report, CEO DiNello added:
Banking Crisis 2.0?
NYCB was responsible for acquiring Signature Bank, a crypto-supportive firm that was forced to close in March 2023 after suffering a wave of withdrawals that afflicted regional banks across the country.
Other major crypto banks, including Silvergate Bank and Silicon Valley Bank, were also forced to shut down at the time. When the U.S. government opted to bail out depositors to the latter, Bitcoin’s price shot up from $19,000 to $30,000 in the following days.
The post Got Bitcoin? Another US Bank Shows Signs of Weakness After Acquiring Signature appeared first on CryptoPotato.
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