Rising COVID-19 circumstances in Texas, Florida, California, Arizona, and Georgia may portend “vital stress” for companies in these areas, particularly if governors droop or backtrack on reopening plans.
That, in flip, can strain credit score high quality and, by extension, banks, Morgan Stanley’s Ken Zerbe wrote in a be aware.
Banks with the biggest greenback publicity embody Bank of America (BAC +0.8%), with $6.18B in deposits throughout these 5 states (in keeping with 2019 information); Wells Fargo (WFC +0.7%) with $467B; JPMorgan Chase (JPM +0.7%) with $420B, and Truist (TFC +1.6%) with $140B.
Non-U.S.-based banks with vital publicity embody Mitsubishi UFJ (MUFG +0.6%), BNP Paribas (OTCQX:BNPQF), and BBVA (BBVA +3.3%).
California-heavy banks embody First Republic (FRC +0.6%), CIT Group (CIT +5.9%), East West Bancorp (EWBC +3.4%), Synovus Monetary (SNV +5.4%), and SVB Monetary (SIVB +0.6%).
42 banks have at the very least 50% of whole deposits situated in these markets: Cullen/Frost Bankers (CFR +3.0%), SIVB, Prosperity Bancshares (PB +3.3%), EWBC, CIT, SNV, Cadence Bancorporation (CADE +8.2%), FRC, BankUnited (BKU +8.6%), and Zions Bancorporation (ZION +2.5%), he wrote.
The BKX Bank Index features 1.3% in Monday afternoon buying and selling, after sliding 6.4% on Friday.
BKX Index efficiency YTD: