By Mama Saini, Arasu Kannagi Basil and Ateev Bhandari
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Zions sank 12% after disclosing it would take a $50 million loss in the third quarter on commercial and industrial loans from its California division. Western Alliance stock plunged nearly 11% after the bank revealed it had separately filed a fraud lawsuit against Cantor Group V, LLC. Investment bank Jefferies, which held an investor day on Thursday, jumped 9%. The firm revealed its stock of auto parts for the first time, and its stock has fallen more than one-fifth since the start of the brand’s Brand’s Brand’s.
“It shows that you can’t take credit quality for granted, and poor credit quality at one bank in one bank can drag down a group very quickly,” said Stephen Biggar, banking analyst at Argus Research.
Jefferies left with ‘unanswered questions’
Jefferies’ Investor Day was closed to the media. Morgan Stanley Analyst Ryan Kenny said Jefferies’ investment day was very good for a low-end business, “but it left some unanswered questions about early stage products and whether Jefferies could be risk-averse.”
Jefferies did not respond to the opposition’s request for comment. Zions did not respond to a request for comment.
“It appears that investors are choosing to sell first and ask questions later in relation to Jefferies,” said Sean Dunlop, banking analyst at Morningstar Research, in a note
The conditions shook the broader market, with the Regional Banking Index dropping 5.8% and the S&P 500 losing nearly 1%.
Wall Street analysts drew parallels from Zions’ exposure to the collapse of the auto parts market, which has been fueled by questions over sellers’ oversight and raised questions about the credit market’s visibility.
BrokerAdoge pointed to jpmorgan Chase CEO Jamie Dimon’s comments this week on concerns in the credit market after the bankruptcy of prime and subprime lender elender tricolor.
As the world’s biggest lenders file unsecured claims, the issue has become a key test of visibility and management in the fast-growing Reverse Credit Market.
JPMORGAN WRITTEN $170 million in the third quarter related to the Tricolor Bankruptcy and said it was reviewing its controls.
“When you see one rooster, it’s possible there are more, so everyone should be forewarned,” Dimon said.
The sale of the banks comes more than two years after the failure of Silicon Valley Bank’s 2023 failure, when high interest rates blew up the papers that lost their obligations, sparking a deadly deposit run with the Signature of the Past.
The first products, the tricolor set the light for risk management
The bankruptcy of the first products and the tricolor set the stage for the management of banking risks and an opaque credit market, where complex loans and new areas made it difficult to reveal participants.
Zions said it is expected to recognize the lawsuits in the third quarter and file a lawsuit in California to get the loan.
Western’s disclosure said it is alleged that the defendants violated the mortgage loan and security by creating title policies related to Lien – Legal Claim – Legal Claims multiple loans.
An August Court filing showed Cantor was a company that did business in Los Angeles’s Angeles County.
Western will provide context about its diversified business model and strong credit structures” when it calls for quarterly results on October 21, the bank said in an email.
Attorneys for Cantor and the other defendants could not immediately be reached for comment.
Western sought to reassure investors, it said its non-performing assets – debt identified as weak – were lower than on June 30.
Some analysts still see the collapse as idiosyncratic and tied to specific lenders, rather than planned. But the cases are reviving the irregularities.
“In times of more credit, you’re going to have more fraud,” said Mike Mayo, a banking analyst at Wells Fargo. “Right now, the popularity in general is going well, but there is a high demand to watch the latest news.”
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