Zions Bancorporation and Western Alliance are regional banks in the USA, and not particularly well-known to the general public or otherwise significant. However, these two have backed down sharply during Thursday's stock market trading and have now dragged significantly larger players and even Swedish banks into the downturn.
The background is the announcement that Zions will make a "significant write-down" related to bad loans to a couple of borrowers. Western Alliance, in turn, is backing down due to reports that a borrower has committed fraud.
Plummeted sharply
While the two banks plummeted 13 and 11 percent, respectively, all four major banks on the Stockholm Stock Exchange are being pulled down, as well as leading banks in Europe.
Even consumer credit companies like Klarna are being pulled down, Klarna's stock fell 6 percent to a new low in New York on Thursday and is backing down further in trading.
The news comes after the announcement that the bankruptcies of two American companies: First Brands Group and Tricolor Holdings, both in the automotive industry, will also have consequences for the American major bank JP Morgan.
In connection with the week's quarterly report, it was announced that JP Morgan had taken a credit loss of 170 million dollars, approximately 1.6 billion Swedish kronor, related to Tricolor, something that CEO Jamie Dimon called "not our proudest moment" regarding the bank's exposure to the crisis company.
JP Morgan can handle this, it's relatively small money for them. But for regional banks, it could be significantly larger sums, and then you get worried, says Andreas Håkansson, bank analyst at SEB.
Sees cockroaches
If this is now the beginning of several such events, Dimon said in connection with the bank's interim report:
My antennae go up when something like this happens. I probably shouldn't say that, but when you see a cockroach, there are probably more.
Andreas Håkansson:
That probably made people think that there may be more of the same type, and then you get worried about regional banks.
Are you worried?
Were there to be problems for the major American banks, then I would be worried, because it is systemically important for the global financial market, but if there are problems in an American regional bank, I am not the least bit worried about Swedish banks.
Corrected version: Corrects to 1.6 billion and not 16 billion kronor.
