(Reuters) – New York Community Bancorp shares rose before the bell on Tuesday on turnaround hopes after top executives took steps to boost confidence in the lender grappling with a pile of loans tied to the stressed U.S. commercial real estate sector (CRE).
Since posting a quarterly loss due to higher provisions and slashing its dividend on Jan. 31, the market value of the New York-based bank has dropped by nearly $4 billion.
Its shares were trading 2% higher after closing down 0.2% in the previous session.
The steep slide in its shares began to ease last week after the lender named banking veteran and turnaround expert Alessandro DiNello its executive chair.
He promised to reduce NYCB’s exposure to CRE by either selling the loans under that portfolio or allowing them to run off the balance sheet naturally.
On Friday, DiNello and a handful of other top executives also purchased more than $870,000 worth of lender’s shares, in an attempt to bolster confidence in the ailing stock.
NYCB’s results have raised concerns among investors about other banks, especially those with high exposure to CRE, as interest rates elevated and the demand for office space weakens.
The KBW Regional Banking Index, a key index to gauge investor sentiment toward the regional banking sector, has lost around 8.4% so far this year.
(Reporting by Mehnaz Yasmin and Niket Nishant in Bengaluru; Editing by Arun Koyyur)
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