S&P/ASX 200 Index (ASX: XJO) bank shares are putting on a mixed performance on Friday after the banking crisis taking major markets by storm continued overnight.
Stock in United States (US) regional banks PacWest Bancorp (NASDAQ: PACW) and Western Alliance Bancorporation (NYSE: WAL) plummeted 51% and 38% respectively overnight, with regulators stepping in to halt trade in the pair, the Guardian reports.
They're suffering follows the collapse of US peers Silicon Valley Bank and Signature Bank in March. Not to mention, the Swiss government-brokered deal for UBS to acquire Credit Suisse before it crumbled.
But that's not all that's going on with ASX 200 bank shares on Friday.
Stock in two majors, ANZ Group Holdings Ltd (ASX: ANZ) and Macquarie Group Ltd (ASX: MQG) moved in opposite directions after both banks released earnings earlier today.
Let's dive into all that's going on with ASX 200 bank shares today.
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ASX 200 bank shares a mixed bag on Friday
ASX 200 bank shares are putting forward mixed performances on Friday. Take a look:
- ANZ shares are leading the majors, gaining 1.6% on the back of the bank's first-half earnings
- Westpac Banking Corp (ASX: WBC) shares are also up, rising 0.7%
- Commonwealth Bank of Australia (ASX: CBA) stock is up 0.4%
- Meanwhile, Macquarie shares have recovered earlier falls to trade flat on the bank's full-year earnings
- Finally, National Australia Bank Ltd (ASX: NAB) shares are plunging for a second consecutive day, falling 0.7%
For comparison, the ASX 200 is up 0.14% right now while the S&P/ASX 200 Financials Index (ASX: XFJ) has gained 0.29%.
US banking crisis continues
It's been a big week of potentially worrying news from the US banking sector, culminating in more regulatory action overnight. Many commentators warn the continued slate of bank collapses could be an early sign of recession in the globe's largest economy.
Earlier this week, First Republic Bank became the US' second largest bank failure in history when regulators took control, selling the bank to JP Morgan Chase, BBC News reports.
It was a similar story as that of numerous recent collapses – including Silicon Valley Bank. Our chief investment officer Scott Phillips explained that collapse in detail at the time.
Overnight, PacWest's share price crumbled after the bank confirmed it's exploring strategic options, including a sale, with several partners and investors in the wings. Though, it also noted it hasn't experienced any out-of-the-ordinary deposit flows.
Meanwhile, rumours Western Alliance was also considering a sale were emphatically shot down.
The bank said reports touting the claims were "categorically false in all respects" and it's considering its legal options.
Despite both banks denying they're close to joining First Republic Bank in receivership, market watchers may remain unconvinced given the shocking fall in their share prices. Find their recent performances – not including their overnight falls – below:
What would the banking crisis mean for ASX 200 shares?
Fortunately, ASX 200 bank shares have been found to be the world's most capitalised.
Thus, it's unlikely our market favourites will be dragged into the drama currently happening in the US.
However, as the saying goes: 'When America sneezes, the world catches a cold'.
It's likely that, if the US were to fall into a recession, Australia – and the ASX 200 – would be impacted to some degree.
